The influx of Chinese e-commerce platforms like Temu, Taobao, and 1688 has stirred a wave of low-cost goods in Vietnam, creating unprecedented challenges for local businesses. This competition is not just about price but has escalated into a battle for product quality and service. Vietnamese local small businesses risk being eliminated if they don’t adapt.
Vietnamese consumers increasingly ask, “Why not choose Chinese products?” These are often cheaper, more convenient, and have faster shipping. Chinese goods have saturated both discount stores and online platforms like Shopee, Lazada, and TikTok Shop, making it hard for local products to maintain market share.
With free shipping, fast delivery, and generous return policies, Temu has rapidly gained attention. The platform also provides a Vietnamese language interface, making shopping accessible. Additionally, the logistics of transporting from Guangzhou to Vietnam is faster than to other Southeast Asian markets.
The intense competition, previously dominated by foreign platforms like Shopee and Lazada, has been further intensified by Temu’s entry, forcing local businesses to reconsider strategies. Many are unable to keep up, citing the challenges of competing against subsidized Chinese products that benefit from strong logistical support and pricing advantages.
Vietnamese businesses are advised to focus on product quality, after-sales service, and improve logistics to remain competitive. Investing in local warehousing, promoting free shipping or discounts, and emphasizing the strength of Vietnamese brands could help reclaim consumer trust. Diversifying export markets, such as targeting India, Southeast Asia, Europe, and the U.S., is also seen as essential for Vietnamese businesses to reduce risks and thrive in a globalized economy.
Low-cost products with fast delivery – how?
According to a recent research, Temu has a large source of low-cost goods and can deliver quickly in part because the platform operates on a full consignment model. This means that suppliers agree on wholesale prices and send their products to Temu’s warehouse.
The remaining steps, such as marketing, shipping, and retail, are managed by the company. Temu partners with major logistics companies like ZTO and KYE (for domestic shipping within China) and DHL, FedEx, and UPS (for international shipping).
Especially in the last-mile delivery, local carriers like Ninja Van and Best Express handle the delivery to customers in Vietnam.
This model helps minimize shipping and marketing costs, allowing Temu to offer products at lower prices while ensuring that sellers maintain their profits.
For example, an item that retails for $19 on Amazon could be reduced to $16 on Temu, yet still keep the same profit margin for the seller thanks to cost optimization.