The Vietnamese government sent an ultimatum to Chinese retailers Temu and Shein to register with the government within November or the site would be blocked from being used in the country.
The Chinese online retail sites have raised concern among local businesses and within Vietnam’s government about their impact on the local market due to price dumping. The country’s trade minister also pointed out the potential risk of the site allowing the sale of counterfeit goods.
Vietnam’s deputy trade minister, Nguyen Hoang Long, reported during a government meeting on the weekend that the ministry had sent a notification regarding licensing to both Temu and Shein.
If they do not comply the Ministry of Industry and Trade and other related agencies will take the necessary measures such as blocking the retailer’s application and site domain. The retailers did not immediately respond to a request for comment.
Shein is a fast-fashion retailer that has been doing business in Vietnam for around two years, while Temu, an e-commerce site owned by Chinese PDD Holding, has recently opened its storefront for Vietnamese users last month.
Goods imported to Vietnam that are no more than one million dong ($40) are to be exempt from value-added tax. According to the finance ministry, items that were imported via these e-commerce platforms are benefiting from the tax break, currently, the ministry is looking to remove the tax break.
Outside of Vietnam, both Shein and Temu have come under scrutiny and legal action from many countries. Indonesia requested Apple and Google to block Temu from their app store last month to protect smaller retailers from the price dumping tactic.
This year, Vietnam’s online market has grown 18% and is worth $22 billion, following behind Indonesia and Thailand in its size, according to a Google, Temasek, and Bain & Company report last week.
