When Temu entered Pakistan in late 2024, it launched an all-out digital advertising blitz and dangled prices so low they seemed implausible, convincing millions of consumers they could “shop like a billionaire.” Within months, the platform had hooked buyers, squeezed local competitors, and driven a surge in downloads. But, as with most offers that appear too good to be true, the model soon revealed its fragility. Built on subsidies and loopholes rather than sustainability, it was never designed to endure. In recent weeks, as reported by the Express Tribune, the Competition Commission of Pakistan has formally recommended to the Pakistan Telecommunication Authority that Temu be blocked, describing its conduct as predatory and anti-competitive. The notice comes on the back of mounting consumer complaints and a sudden spike in prices, exposing how the overseas platform entered Pakistan not as a partner in retail development but as a Trojan Horse.
According to an investigative report by Profit, Temu’s model bypassed traditional supply chains, compelled overseas factories to produce at scale, and relied on billions of dollars in foreign subsidies to dump products into markets with weak regulatory frameworks. Its outlay in Pakistan was never an investment in the domestic economy, but a loss-leading tactic designed to destabilise local sellers while leaving behind no infrastructure, no jobs, and no tax contributions. Local businesses continued to shoulder customs duties and compliance costs, while Temu exploited Pakistan’s de minimis exemption, which allowed parcels under Rs5,000 to enter duty-free. This was not fair competition but the calculated use of loopholes that no local player could hope to match.
The turning point came on July 1, 2025, when, after sustained pressure from industry groups such as the Chainstore Association of Pakistan and the Pakistan Retail Business Council, the government slashed the duty-free threshold to Rs1,000 and ordered tighter customs checks. That single move exposed the fragility of Temu’s model. Almost overnight, products that had sold for a few hundred rupees shot into the thousands. Industry insiders told Profit the hikes could not be explained by the new duty rates, but by the sudden end of systematic under-declaration once customs began enforcing fair value assessments. With the loophole closed, Temu’s artificial edge disappeared and its pricing illusion quickly unravelled.
Consumers quickly felt the reversal. Many who had accepted long delivery times and weak product quality only because prices were rock-bottom now faced overpriced goods with none of the promised value. Demand shrank, stripping Temu of the volumes it needed to negotiate bulk discounts from suppliers. What had seemed like a revolution in online shopping revealed itself as a product dumping strategy.
It was only after this collapse that the CCP finalised its review and concluded Temu’s operations were anti-competitive. The Commission’s recommendation underscored what many in the industry had warned: that Temu’s impact was not growth but destruction. By the time the notice was issued, however, the Trojan Horse had already breached the gates, leaving Pakistan’s e-commerce ecosystem weakened.
Beyond consumer disappointment lies a larger economic concern. The billions Temu poured into subsidies were never circulated locally. Unlike local businesses, Temu did not invest in warehouses, technology, or domestic supply chains. It created no employment and paid no significant taxes. Every rupee spent on the platform was value drained outward, enriching foreign supply chains while hollowing out local commerce. SMEs and small retailers lost sales they might have reinvested at home. In effect, Temu engineered a wave of capital flight, undermining the very foundations of Pakistan’s digital economy.
The story fits a broader global pattern. In the United States, Temu exploited a generous $800 duty-free threshold to flood the market until regulators intervened with tariffs of up to 145% in April 2025. Indonesia, Vietnam, and Uzbekistan moved even earlier to protect their domestic industries. Pakistan is now following into the footsteps of more developed markets to safeguard its local SMEs. The CCP’s call for a ban signals an overdue recognition of the damage done. Whether regulators now act decisively will determine if Pakistan can protect its fragile digital economy or leave it open to further exploitation.
