Azernews.Az

Temu, a Chinese e-commerce platform, has come under scrutiny by the Competition Commission of Pakistan (CCP) over alleged misleading practices that are distorting the local market, Azernews reports, citing foreign media.

Temu entered the Pakistani market just a few months ago with an aggressive digital advertising blitz, flooding various platforms with promotional content. These ads, promising huge discounts and seemingly risk-free purchases, quickly attracted a large consumer base while putting local sellers at a significant disadvantage due to Temu’s scale and pricing strategies.

A coalition of independent retailers and sellers, known as the Chainstore Association of Pakistan (CAP), filed a formal complaint with the CCP, accusing Temu of engaging in anti-competitive behavior harmful to both consumers and domestic businesses. The association stated,
“We urge the Competition Commission of Pakistan to investigate the rising anti-competitive conduct driven by unregulated foreign e-commerce platforms like Temu and Shein.”

These platforms operate without any physical or legal presence in Pakistan, selling artificially underpriced and sometimes substandard products shipped under the De Minimis exemption, thereby avoiding taxes and import duties. Meanwhile, local retailers, online sellers, and manufacturers comply fully with tax, customs, and regulatory obligations. This creates an uneven playing field with serious economic consequences.

CAP highlighted the massive displacement of formal, tax-paying local businesses, along with a decline in consumer protection, quality control, and regulatory oversight.

Another concerning issue is Temu’s requirement for pre-payment in foreign currency, with no cash-on-delivery option, which the association warns could negatively impact Pakistan’s current account balance.

“We call on the CCP to take prompt action and launch a formal investigation into these foreign platforms operating without compliance,” the association said.

CAP also recommended close regulatory collaboration with the Ministry of Commerce, Federal Board of Revenue (FBR), and Securities and Exchange Commission of Pakistan (SECP) to enforce registration and ensure fair competition. Additionally, they urged logistics and courier companies to process only shipments accompanied by valid commercial invoices and correctly declared retail values.

The association also called for the implementation of verifiable tracking systems and mandatory digital submission of all shipment data to relevant authorities for effective monitoring.

Pakistan’s formal retail sector, manufacturers, importers, and e-commerce players are increasingly uncompetitive due to these practices, posing long-term risks to the integrity of the country’s tax and trade ecosystem.

“These foreign operators violate the spirit of fair competition and undermine Pakistan’s regulated economy. CAP stands ready to support any measures CCP deems necessary,” the statement added.

Separately, a group of independent sellers also filed a complaint through the Office of Fair Trade in Islamabad, claiming that Temu’s pricing strategies distort the market and mislead consumers, making it difficult for local businesses to compete.

One of the core allegations is Temu’s predatory pricing strategy. By offering products at extremely low prices, Temu is accused of undermining fair competition and threatening the survival of small local retailers who comply with all regulations and tax policies.

Logistics and import industry insiders have reported that Temu frequently undervalues goods, splits high-value orders into smaller parcels to stay below tax thresholds, and mislabels products to avoid customs duties. These unethical and illegal practices raise serious concerns about the effectiveness of recently introduced policies without stronger enforcement.

Despite mounting evidence, customs authorities have taken limited action. While local businesses often face penalties for minor infractions, platforms like Temu continue to operate with minimal oversight, creating an uneven competitive environment. Domestic sellers are under increasing regulatory and financial pressure despite their crucial contribution to employment and the economy.