Temu faces CCP scrutiny for anti-competitive practices

Temu, a Chinese e-commerce platform, has come under the radar of the Competition Commission of Pakistan (CCP) over alleged misleading practices that are said to distort the local market.

Temu entered the Pakistani market a few months ago with an aggressive digital advertising campaign, flooding platforms with promotional content. These ads, which promoted heavy discounts and seemingly risk-free purchases, quickly attracted consumers while putting local sellers at a disadvantage due to the scale and pricing Temu offered.

A coalition of independent retailers and sellers, the Chainstore Association of Pakistan, submitted a grievance to the CCP, alleging that Temu's practices are anti-competitive and harmful to both consumers and domestic businesses. "We write to alert the Competition Commission of Pakistan regarding growing anti-competitive market behaviour stemming from the influx of unregulated foreign e-commerce platforms such as Temu and Shein," the statement said.

These platforms, which have no physical or legal presence in Pakistan, are operating freely via online portals, offering artificially underpriced and/or substandard products shipped under the De Minimis exemption, without paying any taxes or import duties. Meanwhile, local retailers, online sellers, and manufacturers are fully compliant with tax, customs, and regulatory obligations. This creates a distorted and unfair playing field, with serious economic consequences.

The association has pointed out the massive displacement of formal, tax-paying local businesses, along with the loss of consumer protection, quality control, and regulatory oversight.

Temu is currently encouraging pre-payments in foreign currency with no cash-on-delivery option, which the association claims is likely to undermine the country's current account balance.

"We request the CCP to take action and initiate a formal investigation into the market practices of such foreign platforms operating without compliance."

The association has recommended regulatory collaboration with the Ministry of Commerce, FBR, and SECP to enforce registration and fair competition. It has also urged logistics and courier companies to only process shipments with valid commercial invoices and ensure each parcel has the correct declared retail value.

It further called for the use of a verifiable tracking system and the submission of all shipment data digitally to relevant authorities for monitoring.

Pakistan's formal retail sector, manufacturers, importers, and e-commerce players are being rendered uncompetitive by these practices, which pose long-term risks to the integrity of the country's tax and trade ecosystem.

"These foreign operators are violating the spirit of fair competition and undermining Pakistan's regulated economy. CAP is ready to provide any assistance in this matter and supports all actions CCP deems appropriate," the association said.

Additionally, a separate complaint has also been filed through the Office of Fair Trade in Islamabad by a group of independent sellers who claim that Temu is distorting the market and misleading consumers, making it difficult for local businesses to compete.

One of the central allegations is Temu's pricing strategy, described by complainants as predatory. By selling products at extremely low prices, Temu is accused of undermining fair competition and threatening the survival of small local retailers who comply with all regulatory and taxation policies.

Logistics and import industry insiders have reported that Temu frequently under-declares the value of goods, breaks high-value orders into smaller parcels to stay below tax thresholds, and mislabels products to avoid customs duties. These practices are not only unethical but also illegal and raise concerns about whether newly introduced policies will be effective if enforcement is not strengthened.

Despite increasing evidence, customs authorities have taken limited action. While local businesses are often penalised for minor issues, platforms like Temu continue to operate without proper enforcement, creating an uneven playing field. Domestic sellers face growing regulatory and financial pressure despite contributing to local employment and the economy.