‘Local businesses can’t compete’: should Temu be banned in Pakistan?

Earlier this week the Competition Commission of Pakistan (CCP) asked the Pakistan Telecommunication Authority (PTA) to ban Chinese e-commerce platform Temu, known for selling items at heavy discounts, often below cost, thanks to subsidies from parent capital and supplier-side efficiencies.

In a letter (dated August 22, 2025) seen by Business Recorder, the CCP said, “the Pakistan Retail Business Council has requested the Government of Pakistan to impose a ban on Temu, citing potential adverse impacts on local businesses and consumers“.

So what do experts think about this?

Mutaher Khan, Co-Founder of Data Darbar, was dismissive of the whole move. “Does Temu have some kind of monopoly? No. Why is it being singled out? CCP is an anti-trust regulator and the competition argument doesn’t hold,” he told Business Recorder.

“CCP wants the PTA to take action, will PTA now regulate online shopping apps? Is online shopping a regulated business? This entire move is very strange. If trade is your worry, a lot of the same products are available in Gul Plaza (in Karachi). If anything, this seems like some kind of lobbying effort from the Pakistan Retail Business Council.”

On the other hand, Nauman Sikander Mirza - founder of customer engagement platform Mergn and former CEO of foodpanda Pakistan - seemed to agree with the CCP’s concerns.

“We work with over 50 e-commerce brands in Pakistan and local e-commerce companies are greatly negatively impacted with Temu’s operations,” he told Business Recorder.

“The issue is that as per regulations, a level playing field is not granted to local business as opposed to Temu. Local e-commerce stores have to adhere to local costs like employee taxes, and once you give an international player tax exception it automatically makes the local players non-competitive, as they struggle to match the prices which Temu is offering to the customers.”

Hanzala Raja, founder and CEO of beauty platform Highfy, echoed these sentiments:

“Platforms like Temu bring global trends and affordable products, but when the affordability comes at the cost of predatory pricing and tax leakages, it creates an uneven playing field,” he told Business Recorder.

“Local businesses that pay duties, comply with GST, and employ thousands of Pakistanis can’t compete if the rules aren’t the same for everyone.”

However, according to him, the conversation shouldn’t be about banning innovation, it should be about building a fair, transparent framework where global players and local businesses both thrive.

Pakistan’s e-commerce sector faces operational costs surge amid new taxes

Meanwhile, Hamad Dawood, founder of online shopping platform Farmaish, has a different perspective on the matter.

According to him, the CCP’s attempt to ban Temu “is another reminder of how often our regulatory decisions seem designed to push us further behind the rest of the world“.

“It’s one thing if Pakistan had the manufacturing depth to compete with China across the kind of product range Temu offers. But we don’t. And instead of giving customers more choice, we’re looking to take it away,” he said, speaking to Business Recorder.

“Temu is not a brand; it’s a marketplace. It connects Chinese factories directly to customers around the world. Banning Temu won’t suddenly revive our local industries. If anything, it risks insulating them from competition - the very thing that drives improvement.”

Dawood drew a parallel with Chinese motorcycle manufacturers. He said when they entered Pakistan, local players had two options: become more competitive on price, or raise their quality to justify the premium.

“Many rose to the challenge. Consumers benefited. Industries evolved. What was once an oligopoly became a far more open market - with new players, wider distribution of wealth and resources, and thousands of additional jobs.”

“Why shouldn’t that same logic apply here?,” he asked.

“If our fear is that global marketplaces will dominate, the answer isn’t a ban. The answer is to create a fairer playing field, where platforms compete on price, quality, speed of service, and customer care. Why would anyone wait two weeks for a shipment if a trusted local option existed at a small premium, with real after-sales support?”