Tightening Surveillance and Regulation of E-Commerce Platforms

The entry of the unlicensed e-commerce platform Temu (China) in Vietnam, offering steep discounts of up to 90%, has raised many concerns, creating competitive pressures and unfair market conditions for local businesses. This has prompted alarm among authorities, requiring decisive measures to protect and strengthen the competitiveness of Vietnamese companies.

Temu offers discounts of up to 90%, making its prices highly competitive compared to other e-commerce platforms

On October 26, the Ministry of Industry and Trade issued Document 8598/BCT-TMDT to direct its relevant authorities to reinforce State administration of e-commerce, particularly in response to the operation of unlicensed cross-border e-commerce platforms in Vietnam.

The ministry issued a warning against purchasing goods from cross-border e-commerce platforms, including Temu, Shein, and 1688. It also directed the Legal Department to coordinate with relevant agencies and with the Vietnam E-commerce and Digital Economy Agency (iDEA) to review legal considerations and propose solutions to handle illegal cross-border e-commerce platforms.

In this document, the Ministry of Industry and Trade also requested the Vietnam Directorate of Market Surveillance to work with relevant agencies to coordinate with the General Department of Customs to enhance oversight, detection, and enforcement actions against warehouses and stores associated with unregistered cross-border e-commerce platforms.

According to consumer feedback, Temu offers highly attractive and competitive prices relative to popular e-commerce platforms such as Shopee and Lazada as it offers discounts of up to 90% for each specific product. However, it is notable that, alongside Shein and Taobao, Temu is Temu is contributing to a surge of extremely low-priced goods that is significantly challenging domestic businesses.

Regarding the Temu case, Mr. Hoang Ninh, Deputy Director of the Vietnam E-commerce and Digital Economy Agency - iDEA (Ministry of Industry and Trade), said that they are urgently reviewing the overall impact of cross-border e-commerce platforms such as Temu, 1688, and Shein to to ensure that these platforms comply with legal regulations while operating in Vietnam.

The ministry worked directly with legal teams of cross-border platforms subject to Vietnamese law to request these platforms to complete official registration and adhere to local standards on consumer protection, information transparency, and data security. The specific deadline for foreign companies with websites providing e-commerce services in Vietnam to complete registrations with the Ministry of Industry and Trade is currently stipulated in Decree 85/2021/ND-CP. Failure to comply will result in restricted access to their platforms from in Vietnam.

According to the Vietnam Directorate of Market Surveillance, for registered e-commerce platforms, businesses are permitted to offer discounts of up to 50% without prior notification. Promotions exceeding 50% are only allowed if the platforms participate in national promotional programs, such as those held during Tet and other major holidays.

If cross-border e-commerce platforms are not registered to operate in Vietnam, it becomes increasingly difficult to regulate them, as they do not have a physical presence in the country. As such, So, it is necessary to consider stronger measures, such as removing the app or terminating operations, as has been done in some other countries. Recently, the Ministry of Industry and Trade directed the Departments of Industry and Trade to review their areas to identify any violations related to promotions and to impose direct fines.

Recognizing the need for better oversight to prevent violations in the e-commerce sector, the Vietnam Directorate of Market Surveillance established the E-commerce Team to effectively implement Project 319, as approved by the Prime Minister.

Mr. Nguyen Duc Le, Deputy Director of the Department of Market Management Operations and lead operating officer of workgroups of the E-commerce Team, said: One of the main tasks of the E-commerce Team is to monitor the overall developments, advise on professional measures to promptly tackle violations, advise the General Director of Vietnam Directorate of Market Surveillance and the Director of the Market Surveillance Department to inspect and handle acts in connection with e-commerce; promptly receive and resolve recommendations, reflections, complaints and denunciations about acts of utilizing e-commerce for law violation; and develop comprehensive solutions to protect consumers in e-commerce. The E-commerce Team has inspected and handled many violations on e-commerce platforms.

According to the E-commerce Team, common violations identified and addressed include unregistered transfers of e-commerce websites, unreported e-commerce platforms that failed to notify authorities before selling goods, the sale of counterfeit products online, and the use of unauthorized logos on e-commerce sites.

By Le Hien, Vietnam Business Forum