The entry of Chinese e-commerce giant Temu into Thailand in July 2024 gave consumers a new online shopping choice and led to fiercer market competition.
Thanawat Malabuppha, honorary president of the Thai E-commerce Association, said Thailand is expected to witness an influx of Chinese products in 2025 as Shopee and Lazada offer new features, namely Shopee Choice and Lazada Choice.
These choices offer consignment products or goods that both players procure directly from sellers, bargaining for the best price possible.
Paul Srivorakul, group chief executive of aCommerce, a Southeast Asian e-commerce enabler, said this consignment model reflects a strategic move by both Lazada and Shopee to counter Temu in the Thai market.
However, Mr Paul said it is challenging to implement the model effectively.
While Temu excels at integrating marketing with merchandising, supply chains and logistics, Lazada and Shopee may struggle to replicate this level of operational precision quickly, he said.
Market analytics firm Cube Asia said earlier that while it is too early to gauge Temu's long-term impact on the e-commerce market in Thailand and the region, sellers may need to prepare for another price war.
If Temu can maintain strong incentives and a consistent low-price strategy, it has the potential to change the dynamics of regional e-commerce just as Shopee, Lazada and TikTok Shop have shifted their focus towards profitability, according to Simon Torring, co-founder of Cube Asia.
Temu, the cross-border e-commerce platform of China's PDD Holdings, established a presence in Thailand in mid-July 2024 following launches in the Philippines and Malaysia in 2023.
The platform has achieved remarkable success in Western markets, especially in the US.
By directly connecting manufacturers and wholesalers -- mainly in China -- to customers around the world, Temu offers low prices.
The Thai cabinet agreed to revoke the value-added tax exemption for imported goods valued at less than 1,500 baht, starting from July 5.
The goal was to create tax equality between imported goods, especially from China, and domestically produced goods, particularly by small and medium-sized enterprises.
According to Reuters, Thailand recorded a 20% drop in low-quality imports, mostly from China, since introducing steps to curb cheap Chinese imports that were hurting businesses in Southeast Asia's second-largest economy, a government spokesperson said.
Cheap goods from China have upended local manufacturing and businesses, contributing to a slew of factory closures and job losses, with businesses calling for government action.
Government spokesperson Sasikarn Wattanachan said recently following tighter regulations and inspections in July, the import value of low-quality goods dipped significantly.
Measures were imposed to crack down on imports that did not meet local standards.