- Vietnam’s Government concerned about deep discounting by Chinese platforms
- Vietnam may abolish tax exemption for imported goods
What happened
Vietnam recently issued an ultimatum to Chinese e-commerce platforms Shein and Temu. The Vietnamese government has given them until the end of November to register with the Ministry of Industry and Trade. Vietnam’s deputy trade minister Nguyen Hoang Long said at a government meeting over the weekend that his ministry had worked with Shein and Temu on licensing matters. According to Hoang Long, the government will block access to both platforms if they fail to comply with licensing requirements.
This move follows concerns that Shein and Temu’s aggressive pricing and fast-fashion models threaten Vietnam’ s domestic businesses. Shein, a popular fashion retailer, has been present in Vietnam for some time. While Temu, a unit of PDD Holdings, also entered the Vietnamese market last month.
Vietnam allows imported goods of up to 1 million dong($40) to be exempt from a value-added tax. The finance ministry said most items benefiting from this tax break are imported via e-commerce platforms. And it is considering terminating the tax break.
Also read: Vietnam says Temu, Shein must register with government or be blocked
Also read: Vietnam threatens to block Chinese retailers Shein and Temu over licences
What it’s important
Vietnam’s requirement for Shein and Temu registration reflects a trend in Southeast Asia. Governments are stepping up regulation of foreign e-commerce giants to protect local economies. This stance especially benefits small businesses, such as local fashion brands and traditional retailers, that struggle to compete with these platforms’ low prices and high-volume products. For instance, Vietnamese fashion brand “Blooming Clothes,” a startup producing eco-friendly, locally designed apparel, faces intense competition from Shein’s low pricing and fast-fashion appeal.
These local brands typically advocate sustainability and cultural relevance, but without local regulation, they find it difficult to compete when large platforms enter the market. Vietnam’s regulatory approach provides a protective framework for local businesses, emphasizing sustainable growth and fair competition over rapid market saturation driven by foreign platforms.
Similar regulatory trends are emerging across Southeast Asia, as seen in Indonesia, where Amazon and Lazada face licensing requirements. This type of policy creates a fair competitive environment, allowing smaller companies like Blooming Clothes to grow alongside industry giants.
