Vietnam’s government has set a clear deadline for Chinese e-commerce giants Shein and Temu, demanding that they register their operations in the country by the end of November. This directive emerges amid rising concerns regarding the influence of foreign online retail platforms on local markets, particularly in terms of aggressive pricing strategies and the proliferation of counterfeit products. Deputy Trade Minister Nguyen Hoang Long has sternly warned that failure to comply would result in technical measures to block access to their platforms.
Shein, which has been operational in Vietnam for nearly two years, has already indicated its willingness to adhere to local regulations. In contrast, Temu, a relatively new entrant, has not publicly responded to the directive. The Vietnamese government’s decision aligns with a regional trend where several Southeast Asian nations are tightening regulations on foreign e-commerce entities. For instance, Indonesia has recently urged app stores to restrict access to Temu to protect its local businesses.
Vietnam’s e-commerce landscape is thriving, touted as the third largest in Southeast Asia, with a market value approaching $22 billion. Alongside Shein and Temu, other notable players such as Shopee, Lazada, and homegrown platforms like Tiki and Sendo contribute significantly to the competitive scene. This robust growth has inevitably drawn scrutiny from the government aimed at preserving the interests of local enterprises which are increasingly feeling the pressure of foreign competition.
The essence of the registration requirement focuses on ensuring that foreign online retailers operate under the same standards and regulations that local businesses are subjected to. This is crucial for several reasons: it promotes fair competition, safeguards consumer interests, and helps to combat the sale of counterfeit goods, which remain a significant concern for both consumers and authorities alike.
Moreover, the Vietnamese market has experienced a landscape shift, where deeply discounted products from foreign retailers often disrupt traditional pricing structures for local vendors. These practices not only threaten local businesses but also raise fundamental questions about market sustainability and consumer protection in the long term.
Data shows that e-commerce consumption patterns in Vietnam are changing rapidly, with many consumers leaning towards affordable fast fashion and household goods provided by platforms like Shein and Temu. While consumers benefit from competitive pricing, local businesses find it increasingly challenging to maintain profitability and market share.
Furthermore, Vietnam’s Ministry of Industry and Trade has been proactive in tackling these pressing issues by instituting a framework that requires foreign platforms to register and comply with local laws. This includes provisions related to tax obligations, consumer protection measures, and reporting standards for product authenticity.
By enforcing these registration requirements, Vietnam aims not only to level the playing field but also to support the growth of its own digital economy. Small and medium enterprises (SMEs) that constitute a significant portion of the national economy need to feel supported and protected from the advantages that large foreign corporations could exploit unless regulatory frameworks are in place.
In conclusion, Vietnam’s approach is a significant step in the right direction for fostering a balanced e-commerce ecosystem. It reflects the broader global trend where governments are increasingly recognizing the need to regulate foreign e-commerce practices to protect domestic businesses and consumers. By establishing clear guidelines, Vietnam is sending a message that compliance with local regulations is non-negotiable for all operators, regardless of their origin.
This development highlights the importance of local regulations in creating a fair marketplace and is indicative of the challenges faced by emerging digital markets as they navigate the complexities of globalization and foreign competition.
