Temu in The Vietnam: A Revolution in E-Commerce industry

In October 2024, e-commerce platform Temu officially began operations in Vietnam, the fifth Southeast Asian market for the company. It’s still in its infant phase, the site has a rudimentary version with English language support and credit card only.

Due to proximity to China, shipping can be quick compared to other Southeast Asian countries delivering between 4 and 7 days. But for now that reach is limited: deliveries are handled by just two logistics partners, Ninja Van and Best Express.

Temu sees Vietnam as one of the fastest growing e-commerce markets in the Southeast Asia, driven by a 53 per cent year on year growth in 2023. For this reason, the platform’s expansion into 2024 should expect a similar growth momentum.

As Temu has opened its doors with affordable products and fast delivery services, there is an opportunity for it to gain market share, however, having to adapt to local preferences would be necessary for a long term success.

Yet Temu offerings in Vietnam currently are limited with no localization features such as Vietnamese language support or local payment options that might impede their usage. With maturity, the platform will have to deal with the integration of local payment gateways for different local and international players to take charge of their own business.

However, Temu’s entry into Vietnam is a sign that the company is determined to push further into the Southeast Asian region.

The company could solidify its position in the region as a major e-commerce player if it manages to take its services up a notch and figure out how to adapt to the local market.

In the next few months, we’ll need to find out whether Temu will become a success or not in Vietnam.

Temu in The Vietnam: A Revolution in E-Commerce in a Fast Moving Market

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In Vietnam, E-Commerce Is Booming

The e-commerce market in Vietnam has been soaring at the rate of no return. The country experienced double digit growth in online sales in recent years, with e-commerce platforms’ Gross Merchandise Value (GMV) in billion dollars. Hanoi and Ho Chi Minh City head the pack for urban centers, with a mix of tech savvy consumers, growing middle class and improving digital infrastructure.

As Vietnam has attracted so much attention for its rapid growth, it is also a very good target for the global e-commerce players. Both Shopee, Lazada and Tiki are leaders, but with Temu’s arrival, it brings this level of competition with the company’s distinct business model and aggressive pricing policies.

Temu’s Business and Market Model in Vietnam

This also plays well within a D2C Approach

Like many other fashion and retail companies, Temu works on a Direct to Consumer (D2C) model where manufacturers and buyers are connected directly between each other. Temu is able to sell its products at ridiculously low prices because it eliminates intermediaries. It is an approach that resonates with Vietnamese consumers, who are famously cost sensitive when buying online.

Wide Product Range

From electronics, fashion, home goods, beauty products to many more, Temu has everything. Therefore, this variety meets the varying Vietnamese consumer needs and facilitates the quick establishment of Temu’s customers.

Discount-Driven Strategy

Temu’s name is famous for their deal campaigns: flash sales and daily deals with up to 80% off the price. The successful results these promotions have had in bringing cost conscious shoppers to the web, particularly younger consumers who will go hunting the web to find the best online deals.

Affiliate Marketing Programs

In order to expand reach, Temu has a referral and affiliate marketing. This referral feature encourages customers to refer other people to the service, which does two things: it creates a viral effect positively impacting brand visibility while also augmenting the number of customers.

Shipping and logistics Vietnam

Leading the way of Temu’s logistics and shipping operations in Vietnam has played a significant role in Temu’s strategy of expansion. Temu works with well established players like Ninja Van and Best Express for fast delivery services. This proximity allows for shorter delivery time and most orders come within 4-7 days in China and Vietnam. And naturally, the delivery time of our products is quite different than for other companies in the region where delivery times can take several days.

But in the coming months as Temu scales, maintaining this efficiency will grow increasingly difficult in rural areas where logistics infrastructure may not be as developed.

Temu is Facing Challenge in Vietnam

Regulatory Scrutiny

Recent emphasis on foreign e-commerce platforms by Vietnam’s government reminds us that foreign government involvement in all aspects — especially regulators — is essential. For a company to operate legally, its actual business activities have to be registered and a company has to comply with local laws, for example taxation and promotional limits. Local authorities have criticized Temu for relying on heavy discounting that they say undermines fair competition, and for delayed registration.

Temu has been urged by the Ministry of Industry and Trade to resolve these compliance issues or risk finding itself on the receiving end of restrictions. Such challenges underline the need to build a long term presence in Vietnam by taking into account local policies.

Established Players Competition

Ecommerce market in Vietnam is very competitive with Shopee, Lazada and Tiki have large market shares. This gives these incumbents an existing customer trust, localized operations, and perfected logistics network. How Temu differentiates itself through pricing, product diversity and customers experience will determine how successful it is.

Product Quality Concerns

Assured product quality is a concern with low prices from Temu. Platforms that do not cater to the Vietnamese consumers’ demands find it easy for Vietnamese consumers not to trust them. As Temu grows, and builds and retains trust from its customers, it will be the product quality and offering transparent return policies that will be crucial to ensure it.

Payment and Localization

The problem is that now Temu only takes credit card in Vietnam which is not the best for consumers who like more local ways of payment, like MoMo or ZaloPay. Making the platform more reachable for Vietnamese shoppers means that localizing its payment options will be a key step.

Acces to Opportunities of Growth in Vietnam

Given these challenges, however, Temu is currently in a strong position to participate in Vietnam’s booming e-commerce market. If Temu takes these regulators concerns into consideration while adapting its operations to the local preferences, it can churn out a huge segment of the market for itself. Here are some strategies the platform can adopt:

Expand Payment Options

Introducing Vietnamese local payment methods including MoMo, ZaloPay, and bank transfers will be simpler for Vietnamese consumers to shop on Temu. If you want to go places in a market that’s not cashless yet, you want to have either flexible or a non-cash payment option.

Strengthen Local Partnerships

If Temu wants to build more localized presence then collaborating with Vietnamese logistics providers, retailers and influencers will be beneficial. Such partnerships can increase delivery efficiency, increase brand visibility among local consumers and create trust between the local community.

Focus on Quality Assurance

In order to quell Temu’s product reliability worries, the retailer will establish strict quality control measures along with a solid return policy. Customer reviews and detailed descriptions of product can also maintain a buyer confidence.

Language Localization is something you should be investing

Temu‘s platform is not yet available in Vietnamese yet, but it will be very helpful if Temu translated to Vietnamese. With localization, the platform will become friendlier and get more accessible to users, especially to rural consumers or those who are not so fluent in English.

Use Vietnam’s Growing Mobile Commerce

Mobile commerce is a big deal among Vietnamese consumers. Further to this, you could optimize the Temu app for mobile users, or provide exclusive app based promotions to increase engagement and in turn sales.

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The Future of Temu in Vietnam

Temu’s arrival Vietnam represents an exciting chapter for Temu and the local e-commerce market in general. Through the company’s competative pricing and innovative business model, the company is potentially disruptive to the market and threatens existing players. But for Temu to see sustainable growth, it will have to solve regulatory challenges, augment its localization work and garner trust through its quality and reliability.

The introduction of Temu in Vietnam’s developing e-commerce market will only contribute to the competition of innovation in the Vietnamese market, and will help consumers with better choices and cheaper prices. As long as Temu uses the right strategies and invests wisely, it has the chance to become one of the main players among Southeast Asia’s smartest digital economies.

Temu in The Vietnam

Temu in The Vietnam: A Revolution in E-Commerce in a Fast Moving Market

In Vietnam, E-Commerce Is Booming

Temu’s Business and Market Model in Vietnam