Vietnam is considering banning popular Chinese online shopping apps Shein and Temu due to their failure to meet a deadline set by the Vietnamese government. The government has stated that unless Shein and Temu register their business operations with Vietnam’s trade ministry by the end of November, their internet domains and apps will be blocked in the country.
Shein has been operating in Vietnam for some time, while Temu, which is owned by Chinese e-commerce giant PDD Holdings, only recently started operations in the country. Vietnamese officials have raised concerns about the market practices of Chinese online retailers, particularly their aggressive pricing strategies and product quality issues.
Deputy Trade Minister Nguyen Hoang Long confirmed that the ministry has been in talks with both Shein and Temu regarding licensing compliance. If the platforms do not comply with the registration requirement, the Ministry of Industry and Trade will work with relevant agencies to take technical measures such as blocking their applications and domains.
In addition to facing potential regulatory action in Vietnam, Temu is also under investigation by the European Union. The European Commission has opened an investigation into Temu over suspicions that the platform is not doing enough to prevent the sale of illegal products. Temu has been classified as a “very large online platform” under the bloc’s Digital Services Act, subjecting it to strict scrutiny.
The EU’s investigation into Temu is focused on consumer protection, fair competition, and data privacy issues. Regulators are concerned about the sale of non-compliant goods on the platform, as well as addictive design features and the transparency of recommendation algorithms. There are also worries about the ease with which suspended traders can return to the platform.
This move by Vietnam and the EU reflects a growing trend of regulatory scrutiny over online shopping platforms, particularly those operated by Chinese companies. As consumers increasingly turn to online shopping, regulators are keen to ensure that these platforms adhere to strict standards and regulations to protect consumers and ensure fair competition in the market.