Nhu is a Partnerhip Director for a Vietnam-based tech startup in supply and logistics and also a building member of Vietnam's progressive women community. Nhu has been cultivating investor relations and innovative partnerships, developing various digital initiatives in Vietnam across e-commerce, q-commerce, digital payment, fintech, insurtech, etc.
Philippines was Temu’s 38th country when it entered SEA in August 2023. As of October 7, 2024, Temu is in 82 countries and territories, and it is not beyond the forecast that Temu will expand in Vietnam in late September.
In the previous two weeks of October, Vietnamese people have talked more about Temu due to their marketing activities—these marketing initiatives are similar to their other market opening formula.
Observing Indonesia, another country striving to protect its domestic industry from ByteDance and PDD, I’ll discuss the opportunities and challenges for the domestic market regarding Temu’s Vietnam expansion.
1. Challenges
Only when more Vietnamese enterprises are involved in Temu’s supply chain will there be benefits for the domestic economy. Otherwise, cash flow is leaving the country. Local consumers’ cash is spent on regional platforms, foreign suppliers, foreign shipping, and on other foreign middle-layer parties.
Domestic manufacturing businesses face pressure:
a) pricing, and b) limited consumer spending, now exacerbated by price competition.
Local marketing stakeholders could leverage Temu’s marketing budget at this market-entering stage; however, the benefits are short-term and depend on the company’s strategy and its fraud detection control.
The incumbent market’s business strategy is centered on ROI and can be adjusted quickly to better serve its objectives.
Especially, these people are PDD; they possess the capacity to utilize money and perform extremely effectively and efficiently. Earlier this year, TikTok Shop reduced subsidies and increased commissions across several SEA countries, indicating a shift towards profitability trends.
2. Opportunities
To leverage the economic benefits and maintain the country’s economic ecosystem, there is a need to enable more domestic players to participate in the supply chain, including brands, enablers, payment solutions, delivery services, packaging, aggregators, etc.
This requires the capacity of domestic companies and the necessary opportunities and support of the country’s strategy for local businesses and startups.
While it improves the current stagnant employment situation by generating additional job opportunities, it is crucial to develop mid- to high-level personnel with experience for the long-term growth of the Vietnamese workforce.
The competition of Bytedance, PDD, SEA, and Alibaba drives the growth momentum of the e-commerce economy in Vietnam. To seize the opportunities outlined, it is crucial to have the country’s support for investment and financing for local businesses.
