The Federal Revenue authorized Temu to operate in Brazil, reported Valor International.
Temu, owned and operated by PDD Holdings, the third-largest digital services platform in Asia, can now start selling products in Brazil without charging consumers 60% import tax on shipments below $50. It will still charge an ICMS rate (a VAT-like tax) of 17% on the amount.
Given the perception that Temu will invest heavily to gain market share, competition for sales is expected to intensify in Brazil. Other e-commerce giants such as Amazon, Alibaba, Shopee and Shein are already operating in the country. Santander published a report suggesting that traditional sector companies, such as Mercado Libre and Magazine Luiza, could feel a greater impact from Temu’s entry.
A Chinese retailer is coming to Brazil, while local industry and retailers increase pressure to bring the issue of ending import tax exemptions for foreign websites to the forefront in the Lower House. In Brazil, online sellers who participate in the Remessa Conforme tax incentive program get an exemption from import taxes for shipments up to $50.
Launched in 2022, Temu already operates in about 50 countries around the world, including the US, UK and other Latin American countries, emphasizing the need to expand into emerging markets.
Temu is known globally for selling everything at low prices — and for criticism from governments due to alleged imports of counterfeit products and using forced labour.
Among Chinese groups, it’s only behind Alibaba’s Taobao and Douyin—the owner of a social media platform dubbed China’s TikTok—in terms of market value.
Sources: Valor International, Economic News
