Cheap Today, Costly Tomorrow: The Lessons Pakistan’s E-commerce Can Learn From Temu
Pakistan today offers fertile ground for international tech firms eager to expand into new markets. It is the world’s fifth most populous country, with more than 60% of its population under 30, and internet penetration climbing steadily each year. Global players have already taken notice. Google, Meta, Spotify and TikTok have all expanded their presence and invested in Pakistan in recent years, seeing the same digital potential that has turned neighbouring India into what many call the world’s “MAU (monthly active users) farm.” Against this backdrop, Temu’s entry into Pakistan’s e-commerce scene in late 2024 appeared well timed. The platform launched with an aggressive digital advertising blitz and shockingly low prices that defied commercial logic, drawing millions of consumers within months.
But unlike other global giants that have helped elevate Pakistan’s digital ecosystem, Temu’s rapid rise was built on exploiting weak regulatory guardrails. According to a recent investigation by Profit, its edge stemmed less from efficiency or logistics and more from subsidies funded abroad and loopholes in customs rules. Goods valued under Rs5,000 slipped past customs without duties, while under-declared parcel values further amplified the effect.
The illusion collapsed on July 1, 2025, when the government slashed the duty-free threshold to Rs1,000 and tightened customs enforcement. Prices surged overnight, in some cases doubling or tripling, leaving consumers stunned. Industry insiders told Profit the hikes could not be explained by duties and taxes alone, pointing instead to a crackdown on systematic under-declaration. What had once looked like miracle pricing quickly gave way to frustration and scepticism.
Beyond consumer disappointment lies a more fundamental concern. Temu contributed nothing to Pakistan’s economy while extracting maximum value from it. No foreign direct investment was brought in, no jobs created, and no real opportunities offered to local sellers. Every rupee spent on the platform flowed outward untaxed, enriching suppliers abroad while undermining domestic businesses bound by duties, distribution margins and compliance costs. The absence of a local presence or on-ground teams compounded the problem, leaving consumers with little recourse. Complaints of substandard goods, misleading advertising and opaque refund and return policies piled up for months without resolution.
This pattern is consistent with Temu’s track record abroad. The platform has faced scrutiny or restrictions in the United States, France, Indonesia, Uzbekistan and Vietnam. In Pakistan, regulatory action came only after sustained pressure from local retailers and trade associations. The Competition Commission of Pakistan has since recommended that the Pakistan Telecommunication Authority block Temu outright, describing its tactics as anti-competitive. The CCP’s findings highlight a broader policy question: does Pakistan have the regulatory capacity to ensure global platforms compete on equal terms with local players?
The challenges raised by Temu will not be the last of their kind. As digital penetration deepens and business models evolve at breakneck speed, regulators will face mounting pressure to close gaps that foreign operators routinely exploit. Just last month, the PTA banned nearly 50 gambling and forex applications that were compromising user privacy and financial security. These platforms, much like Temu, built reach through aggressive digital advertising and influencer promotions. Several influencers involved in undisclosed partnerships are now under investigation, underscoring how regulatory blind spots continue to leave consumers and the wider economy exposed.
Temu’s rise and rapid fall in Pakistan should serve as a warning. A thriving digital economy cannot be built on loopholes and arbitrage. It requires proactive regulation, equal treatment of local and foreign players, and policies that ensure value created in Pakistan circulates within Pakistan. Without that, the country risks becoming a dumping ground for platforms whose only lasting legacy is capital flight and weakened consumer trust.
