The emergence of Chinese e-commerce platforms such as Temu, Taobao and 1688 is creating a fever for cheap goods in Vietnam, pushing Vietnamese businesses into an unprecedented difficult situation.
This is not simply a price war but also opens up a fierce race in product and service quality right on the home turf of Vietnamese businesses.
Without timely adaptation measures, Vietnamese businesses risk being eliminated from the game.
"19K" flat price store, free shipping
Much consumer Vietnamese people no longer wonder where to choose goods from, but the question has changed to "Why not choose Chinese goods?" - with cheaper prices, more convenience and faster delivery service.
This pushes Vietnamese businesses into a crisis of confidence from domestic consumers.
Ms. Duong Thuy shared her shopping experience at the store on Phan Van Tri Street (Go Vap District, Ho Chi Minh City). "There is a sign here that says "all products 19K" that I couldn't resist.
Items such as ceramic bowls, household items and fashion accessories all have beautiful designs and are much cheaper than Vietnamese goods at supermarkets."
According to Ms. Thuy, the products here are introduced as being imported in large quantities from China, so they have cheap prices.
The widespread appearance of cheap Chinese goods in stores and on trading floors e-commerce (e-commerce) such as Shopee, Lazada and TikTok Shop make it increasingly difficult for Vietnamese goods to maintain market share.
Ms. Quynh Tran, a housewife in Ho Chi Minh City, said she once bought a Vietnamese rice cooker for 300,000 VND, and had to pay an additional 20,000 VND for shipping.
Meanwhile, a similar Chinese rice cooker costs only 180,000 VND and comes with free shipping. The price difference is so great that Ms. Tran chose Chinese goods.
With free shipping policy, fast delivery, allowing returns within 90 days along with promotions up to... 90%, Temu - a rookie in the Chinese e-commerce field - has quickly attracted attention in Vietnam.
The platform even updated its website to support Vietnamese, making shopping easier.
Customers can buy anything from home appliances to fashion at incredibly low prices with just a few clicks. Quynh Vy, a customer in Ho Chi Minh City, said she couldn’t resist the discounts of up to 66% and delivery times of just 4-7 days.
Shipping from Guangzhou to Vietnam is mainly via road, making Temu's delivery times much faster than other markets in Southeast Asia such as Malaysia and the Philippines, where shipping times can take 5 - 20 days.
Not only Temu, other Chinese sales platforms such as Taobao and 1688 has also provided wholesale and retail sources that are popular with Vietnamese consumers. This makes Chinese goods present everywhere on e-commerce platforms, as well as in stores with the same price in Vietnam.
Retail, domestic production "suffocating"
The emergence and expansion of Chinese e-commerce platforms such as Temu, Taobao and 1688 are changing the face of the Vietnamese market.
Competition is not only between domestic enterprises but also with strong international competitors, with advantages in price, distribution system and marketing strategy.
Before Temu entered, the Vietnamese e-commerce market was dominated by foreign platforms such as Shopee, Lazada, and TikTok. The fierce price competition between e-commerce platforms over the past five years has put domestic businesses in a difficult situation.
Talking to us, many manufacturing and retail businesses commented that the competition between Vietnamese and Chinese businesses in the e-commerce market is no longer just about price but also requires changes in business strategy.
If they do not adapt in time, Vietnamese businesses will be eliminated from this fierce market.
Mr. Nguyen Ngoc Luan - General Director of Meet More Company, a coffee production enterprise in Cu Chi (HCMC) - said he has encountered many difficulties when competing with Chinese goods.
Meet More products, for example a box of coffee costs 85,000 VND, when including the shipping fee of 20,000 VND, the price increases to 105,000 VND.
"Customers hesitate because similar Chinese products are cheaper and have free shipping. We are forced to reduce product prices to get this offer, but the more we reduce prices, the less profit we make," said Mr. Luan.
According to Mr. Luan, many Vietnamese enterprises have received cooperation invitations from China, with the proposal to bring Vietnamese goods to border gates to sell in the Chinese market.
However, when calculating shipping costs and discounts, the profit is almost gone, while Chinese goods entering Vietnam remain cheap thanks to subsidies and support from the transportation system.
Vietnamese businesses are not only facing price differences, but also pressured by China’s strong logistics system and superior distribution services. According to some businesses, it is no coincidence that Vietnamese consumers increasingly prefer Chinese goods.
"In addition to the low price factor, Chinese goods also hit the "fast, convenient and affordable" psychology of modern consumers. Many customers admit that they choose Chinese goods not only because of the lower price but also because of the convenience in shopping," said a household goods manufacturer.
Must change, expand international market
According to domestic retail businesses, Chinese goods will flood into Vietnam because of the many advantages from synchronous investment in building a series of warehouses along the border, organizing central warehouses from Guangdong, Guangzhou... with optimal transportation lines in terms of time, cost, abundant cheap goods and a system of labor and logistics support right in Vietnam.
Mr. Nguyen Xuan Hung, head of the e-commerce logistics department of the Vietnam Logistics Association (VLA), said that to cope with the "wave" of cheap Chinese goods entering Vietnam, Vietnamese businesses need to focus on product quality and after-sales services, while improving the logistics system to reduce costs and increase competitiveness.
An expert in the e-commerce field also said that Vietnam needs to invest heavily in a warehouse system dedicated to e-commerce, because most of the current warehouses serve large manufacturing companies instead of e-commerce businesses. This reduces the ability to process orders and increases logistics costs.
"Improving logistics infrastructure will help optimize operational processes, thereby improving business efficiency," he said, and recommended that building reasonable promotional strategies, free shipping or shipping fee discounts will also help Vietnamese goods compete with Chinese goods on e-commerce platforms.
According to this person, taking advantage of brand and product quality is an opportunity for Vietnamese businesses to regain the trust of domestic consumers.
"In addition to businesses having to improve their competitiveness, experience from many countries shows that there also needs to be a corridor to protect domestic production and retail," he recommended.
Mr. Nguyen Ngoc Luan believes that Vietnamese enterprises need to quickly diversify their export markets, targeting potential countries such as India, Southeast Asia, Europe and the US. This is the way to minimize risks and develop sustainably in the era of globalization.
Many countries seek to block goods from Temu, Shein  Many countries are looking to block cross-border sales of Chinese goods through platforms like Temu and Shein due to concerns about unfair competition. The US, for example, has imposed higher tariffs and reduced duty exemptions for low-value goods. The EU is also considering tariffs on goods under 150 euros and investigating Chinese shipping subsidies. Indonesia recently banned Temu to protect small domestic businesses. According to e-commerce experts, if Vietnam wants to protect domestic production and retail, it also needs a similar legal corridor. In addition, investing in a specialized warehouse system for e-commerce, reducing logistics costs and building appropriate promotional strategies are necessary steps to help Vietnamese goods maintain consumer trust. |
Cheap goods, fast delivery thanks to what? According to our research, Temu has a large source of cheap goods and fast delivery times partly because the platform operates on a full consignment model, meaning suppliers will negotiate wholesale prices and send goods to Temu's warehouse. The remaining steps such as marketing, shipping and retail will be managed by the company. Temu cooperates with major forwarders such as ZTO, KYE (China domestic shipping) and DHL, FedEx, UPS (international shipping). Especially in the last mile of delivery, domestic shipping units such as Ninja Van and Best Express will be responsible for delivering goods to Vietnamese customers. This model helps to minimize shipping and marketing costs, allowing Temu to offer products at cheaper prices while still ensuring that sellers retain profits. For example, an item with a retail price of 19 USD on Amazon can be reduced to 16 USD when coming to Temu but still keep the seller's profit thanks to cost optimization. |
Foreign enterprises dominate e-commerce in Vietnam According to Momentum Works, as of September 2024, Temu is present in 78 countries and territories. In the Vietnamese market, Shopee holds 61% of the market share, TikTok Shop 24% and Lazada 14%. Of these, 2 are representatives from China. Regarding the average order value in Vietnam, Shopee fluctuates between 6-8 USD, Lazada 8-10 USD and TikTok Shop 5-6 USD, Temu has not yet compiled statistics. |
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