Why Vietnam suspended Temu operations

Vietnam authorities disclosed on Thursday that it has ordered Chinese online retailer, Temu to suspend operations in the Southeast Asian nation after it missed a business registration deadline at the end of November.

According to a statement by the trade ministry, the move comes after the ministry and domestic businesses voiced concern about the impact of deep discounting by Chinese online platforms, with the ministry saying it was also worried about the potential sale of counterfeits.

The statement read, “Temu operations will be temporarily suspended until it completes the registration procedure. The platform has submitted an application for e-commerce service activities in Vietnam which is under authorities’ review.”

The ministry did not say how long the suspension would run, or what steps Temu must take before it is lifted.

In November, Vietnam told Chinese online retailers Shein and Temu to register with the government by the deadline or face the blocking of internet domains and a halt in the use of their apps.

Temu, owned by Chinese e-commerce giant PDD Holdings (PDD.O), opened a new tab and started allowing Vietnam shoppers in October, while fast fashion retailer Shein has been selling in Vietnam for at least two years.

On Thursday, Vietnamese-language options were missing from Temu’s website when accessed from Vietnam.

“Temu is working with the Vietnam E-commerce and Digital Economy Agency and the Ministry of Industry and Trade to register its provision of e-commerce services in Vietnam,” the company said in a notice on the website.

Temu revealed toNews platform, Reuters that it had submitted all documents required for the registration, but gave no timeframe to resume operations.

Temu has also stumbled in Indonesia, where regulators have asked Alphabet’s Google (GOOGL.O) and Apple (AAPL.O) to block it in app stores in the country, to protect small merchants.

Last week, Vietnam’s parliament approved legal changes to require payment of value-added tax (VAT) by local operators of foreign e-commerce platforms and urged scrapping of a tax exemption for low-cost imported goods.

At the time, the finance ministry said it had begun the process to scrap the tax break.

The change spells a blow for the foreign-dominated e-commerce industry, which has benefited since 2010 from VAT exemption and rules freeing up duties on imports worth less than 1 million dong ($40).

ALSO READ FROM NIGERIAN TRIBUNE 

Michel Barnier to resign as PM after French government collapse