Thai consumers and entrepreneurs are endeavoring to prohibit the use of the Chinese platform Temu in Thailand’s local market.
Key Takeaways
- The Temu platform is seen as a threat by Thai consumers because it offers Chinese products at very low prices.
- The platform’s business model, which eliminates intermediaries and leverages group buying, has proven highly effective.
- Chinese products have significantly impacted the Thai market, primarily due to their affordability and the sheer volume of imports.
The platform Temu, known for its “Shop Like a Billionaire” tagline, has rapidly expanded its global presence by offering ultra-low prices on a vast range of products. However, its entry into the Thai market has faced stiff opposition from local businesses and consumers due to concerns about unfair competition, supply chain disruptions, and job losses. The Thai government is now closely monitoring Temu’s operations and exploring strategies to address the platform’s impact on the local economy.
Temu’s Entry into the Thai Market
- Temu launched a Thai language app in late July last year, making Thailand the third country in the region to host the platform.
- The Temu app offers baht pricing, free shipping, and a refund system, with products typically taking no more than five days to ship from Guangzhou to Bangkok.5
- Temu’s entry into the Thai market has not been smooth sailing, as it has sparked fears of unfair competition, supply chain disruptions, and job losses.
The Temu platform is seen as a threat by Thai consumers because it offers Chinese products at very low prices.
Temu has managed to expand rapidly in global markets, capturing a large market share in the e-commerce industries in the US and Europe thanks to its business model, which eliminates intermediaries and leverages group buying, which has proven highly effective.
The company arrived in Thailand in July 2023, becoming the third country to receive the application. The platform was quickly seen as a threat to thousands of entrepreneurs and consumers in the country.
Currently, there is a tense situation between the company and Thai consumers, with a movement against the company starting on social media.
Concerns Raised by Thai Businesses and Consumers
- Local businesses are raising alarm bells over the potential impact on their operations, as Chinese manufacturers offering products at significantly lower prices may lead to factory closures and unemployment.
- Concerns have been raised about the quality and safety of products sold on the Temu platform, as they may not adhere to Thai standards.
- A growing opposition movement on social media expresses concerns about supporting an app that doesn’t pay local taxes and potentially takes jobs away from Thai workers.
The social media movement has used hashtags like #แบนTemu (Ban Temu), showing discontent with the company in the country.
In response to the criticism and tension, Thai authorities from various government organizations such as the Revenue Department, Ministry of Commerce, and the Ministry of Digital Economy and Society have begun to address the situation.
Thai Government’s Response
- The Thai government has tasked relevant agencies with developing strategies to address Temu’s entry into Thailand.7
- The Revenue Department has stated that Temu currently does not fall under Thailand’s VAT registration law, making it impossible to compel the platform to register for VAT.8
- As Temu faces robust resistance from Thai entrepreneurs and social media users, coupled with close scrutiny from government agencies, its entry into the Thai market may prove far more challenging than its global expansion efforts to date.9
Chinese products presence increase in the Thai market
Chinese products have significantly impacted the Thai market, primarily due to their affordability and the sheer volume of imports.
The competitiveness of Chinese products in Thailand is driven by several factors. Firstly, the cost of production in China remains lower due to economies of scale, advanced manufacturing technologies, and lower labor costs
This allows Chinese manufacturers to offer products at prices that are difficult for Thai producers to match. Additionally, Chinese companies have been quick to adapt to market demands, offering a wide range of products that cater to various consumer needs.
The impact on the Thai economy has been profound. Many local manufacturers, especially small and medium-sized enterprises (SMEs), have struggled to compete with the low prices of Chinese imports
This has led to a reduction in production, layoffs, and even factory closures. For instance, nearly 2,000 factories in Thailand have shut down in the past year, significantly affecting the manufacturing sector.
