Is Temu Distorting Pakistan’s E-Commerce Market? Authorities Investigate

The Competition Commission of Pakistan (CCP) has launched an inquiry into Temu. The Chinese e-commerce giant faces serious allegations. These include misleading ads, anti-competitive practices, and tax evasion.

Temu recently entered Pakistan with heavy discounts and flashy campaigns. This quickly caught the attention of shoppers. But the move has alarmed local retailers and regulators.

The Chainstore Association of Pakistan (CAP) says Temu is undercutting local businesses. It claims Temu uses legal loopholes to offer unrealistically low prices.

Alleged Exploitation of Tax Loopholes

According to CAP, Temu is misusing the de minimis exemption. This rule lets low-value imports enter Pakistan without taxes. Temu is accused of splitting high-value orders into smaller ones to avoid duties. It also under-declares the value of goods. This helps Temu evade import taxes that local businesses must pay. As a result, tax-compliant retailers face an unfair disadvantage.

CAP also claims that Temu has no legal presence in Pakistan. This lets the company avoid regulations and bypass consumer protection laws. It operates without local accountability or oversight.

Read More: Temu Affiliate Program: Step-by-Step Guide to Easy Online Earnings

Concerns Over Foreign Currency Payments and Economic Risk

CAP also warned that Temu pushes prepayment in foreign currency. It does not offer cash-on-delivery, which is a trusted method in Pakistan. This makes it harder for many local consumers to shop. It also creates risks for the economy. Foreign payments skip the local banking system. This puts extra pressure on Pakistan’s foreign reserves.

Product Mislabeling and Consumer Rights

More allegations claim that Temu is mislabeling imported goods. It is also failing to follow basic product declaration rules. This raises concerns about consumer safety and product authenticity. It also affects transparency. Local businesses must follow strict regulations in these areas.

Calls for Stricter Oversight and Regulatory Reform

In response to these concerns, CAP has formally requested the CCP to coordinate with the Ministry of Commerce, Federal Board of Revenue (FBR), and Securities and Exchange Commission of Pakistan (SECP) to enforce tighter controls on foreign e-commerce operators. Their recommendations include:

• Mandatory registration of foreign platforms operating in Pakistan

• Digital tracking of shipments to ensure proper customs declaration

• Invoicing transparency for all deliveries processed by local logistics companies

• Clear consumer protections aligned with Pakistani e-commerce laws

CAP has also called on courier and logistics providers to refuse delivery of packages lacking valid invoices or declared values, effectively cutting off Temu’s current operational pipeline if no regulatory reforms are made.

Predatory Pricing and Impact on Small Retailers

In a separate complaint to the Office of Fair Trade, Temu is accused of using predatory pricing. It allegedly sells products below cost to crush local competition.

Critics warn this could harm small businesses. It may also create false price expectations among buyers. In the long run, it could lead to market monopolies after local players are forced out.

Broader Concerns Over Unregulated E-Commerce Platforms

The CCP’s investigation into Temu comes at a time of rising concern. Unregulated foreign platforms are bypassing Pakistan’s e-commerce rules. This is hurting local businesses and weakening government control over digital trade.

Analysts warn that the risks are serious. If companies like Temu operate unchecked, it could harm local startups. It may also reduce tax revenue and damage trust in online shopping.

What’s Next?

The CCP and other government bodies are now reviewing the complaints. Industry experts say this could be a turning point for Pakistan’s digital economy. The investigation may decide how Pakistan handles foreign platforms while protecting its market and laws.

So far, Temu has not responded to the allegations. But pressure is growing. Retailers, policymakers, economists, and consumers are all watching. They want to know if Temu will be regulated or allowed to operate freely.