Vietnam has issued a warning to Chinese e-commerce platforms Shein and Temu, demanding that they register with the government by November or face having their internet domains and apps blocked. The action comes in response to concerns over the impact these online retailers are having on local markets, particularly due to their aggressive discounting and concerns about the quality of their products. Shein, a fast-fashion brand, has been operating in Vietnam for some time, while Temu, owned by China’s e-commerce giant PDD Holdings, only began offering its services in the country last month.
Shein and Temu are known for selling cheap fast fashion, which is mainly made in China, as well as home goods and electronics. The companies have been attracting consumers because of their massive discounts and wide selection of products. Still, they have also pressured Vietnamese domestic online shopping sites and traditional retail chains. According to industry insiders, this is especially true for small- and medium-sized enterprises, which need help to compete with the e-commerce giants’ low prices and vast inventory.
Vietnam’s Ministry of Industry and Trade said at a regular government press conference that Shein and Temu are operating in the country without being officially registered, which is against the law. The ministry also warned that if they do not comply with regulations related to information security, taxes, customs, and others by November, they will face severe penalties, including app blocking and cargo clearance suspension.
Vietnam’s government and local businesses have long expressed concern about the impact of these foreign e-commerce sites on local markets because of their deep discounting, which can cause domestic retailers to lose market share. The country’s trade ministry has also said it is worried about the potential for selling counterfeit items on these websites.
Cross-border e-commerce platforms like Shein, Temu, and 1688 are popular in the Vietnamese market because of their low prices and easy customs procedures. However, the government is concerned that their rapid expansion could lead to tax loss and hurt domestic manufacturers, whose goods are priced much higher than those sold on the platforms.
In a bid to curb the rise of Shein and Temu, Vietnam’s central bank said on Monday that it would sell US dollars to the market if needed to keep the exchange rate stable. This measure is meant to ensure the local currency’s stability, which has been volatile since the Federal Reserve cut interest rates last week. The country’s trade ministry has also urged e-commerce sites to strictly regulate their prices and prevent them from using their popularity to destabilize the local currency. The ministry added that this will help protect the country’s small and medium-sized enterprises, which have suffered losses in sales.