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Thailand to tighten scrutiny of shopping app Temu to protect local merchants

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Thailand to tighten scrutiny of shopping app Temu to protect local merchants

Thailand to tighten scrutiny of PDD-backed shopping app Temu to protect local merchants, report says

Thailand authorities are tightening regulations on the bargain shopping site Temu, which entered the Thai market last month, to protect local merchants from the influx of low-priced, direct-to-consumer Chinese products, according to the Bangkok Post.

Prime Minister Srettha Thavisin has directed the Ministry of Digital Economy and Society, the Revenue Department, and police to ensure that Temu, operated by Chinese e-commerce titan PDD Holdings, complies with local laws and pays taxes appropriately, the Thai newspaper reported.

Discussions are under way regarding stricter import measures, the prime minister noted. In July, Thailand introduced a 7 per cent value-added tax (VAT) on imported products priced below 1,500 baht (US$42), effective through the end of December. Next year, a new law will allow the revenue department to continue collecting VAT on such products.

Temu did not immediately respond to a request for comment on Monday.

Temu reported a gross merchandise value of US$20 billion in the first half of the year. Photo: Shutterstock Images

Temu launched its platform in Thailand on July 31, marking its third market in Southeast Asia after the Philippines and Malaysia. The company is offering discounts of up to 90 per cent on some products and promises fast delivery directly from China, with shipping in under five days.

The e-commerce market in Thailand was worth around US$19 billion last year, a year-on-year growth of 34.1 per cent, making it the second-largest in Southeast Asia after Indonesia, according to data from industry consultancy Momentum Works.

The Thai market is currently dominated by Sea Group’s Shopee with a market share of 49 per cent, and Alibaba Group Holding’s Lazada with 30 per cent. Alibaba owns the South China Morning Post.

Temu, which operates in over 70 countries and regions worldwide, reported a gross merchandise value of US$20 billion in the first half of the year, surpassing its total sales for 2023, according to Chinese media outlet 36Kr.

In China, Temu is facing a backlash from merchants who are complaining about hefty penalties imposed by the platform, which they describe as “non-transparent”. leading to a recent wave of protests at its Guangzhou office.

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