Outlook Times

There was a time when the arrival of foreign brands in Pakistan was met with genuine excitement and optimism, seen as a sign of integration into the global economy and an opportunity for local consumers and businesses alike.

Those days, however, are behind us. Today, what Pakistan needs is not just the presence of foreign players, but responsible investment – investment that creates opportunities, fosters competition on fair terms, and contributes meaningfully to local development.

We cannot afford to celebrate market entry when it comes at the cost of turning Pakistan into a dumping ground for low-cost surplus goods, with no regard for the long-term health of our economy or the livelihoods of our people.

E-commerce is one of Pakistan’s strongest bets for creating opportunity among underserved populations seeking sustainable income streams. However, make no mistake, Temu’s entry into Pakistan is not a the start of a new phase; it is a direct and alarming assault on the country’s already fragile local economy. Far from fostering meaningful competition or offering genuine consumer choice, Temu’s aggressive expansion threatens to dismantle the very foundation of Pakistan’s small businesses, entrepreneurs, and community-based sellers, many of whom have spent years building their livelihoods with resilience and perseverance.

Temu’s competitive advantage does not stem from superior service or innovation. It operates on an uneven playing field, circumventing the regulatory frameworks, tax obligations, and consumer protection standards that local businesses are required to meet. By flooding the market with ultra-low-cost goods, often of questionable quality, while making no meaningful financial or legal commitments to Pakistan, Temu forces sellers, particularly women-led home businesses and SME shopkeepers, into an impossible race to the bottom. Each heavily discounted item Temu promotes is a direct threat to the survival of local entrepreneurship.

The warning signs are already clear internationally. American retail giant Forever 21 cited the rise of Temu and Shein as a contributing factor in its bankruptcy filings, highlighting how platforms operating outside conventional regulatory structures and exploiting labour cost differentials have made responsible retail models unsustainable. Pakistan, with its deeper structural economic vulnerabilities, cannot afford to ignore these signals.

The consequences of Temu’s model are disproportionately severe for women entrepreneurs. Across Pakistan, thousands of women have built micro-enterprises, offering clothing, crafts, and home-based services that allow them financial independence in a country where female labour force participation remains among the lowest globally. Temu’s predatory pricing practices threaten to wipe out years of patient community-building and entrepreneurial risk-taking, stripping these women not only of income but of dignity, agency, and their critical contribution to grassroots economic growth.

The damage is not confined to sellers alone. Temu’s operational approach is actively corroding consumer trust in Pakistan’s nascent e-commerce sector. Delays in delivery, misrepresented products, poor customer service, and impractical return processes are becoming the defining features of the Temu experience for Pakistani buyers. In a country where digital commerce is still in its formative stages, these experiences have consequences that ripple far beyond Temu’s own customer base. When consumers are disappointed by a Temu purchase, they often become wary of online shopping altogether, unfairly punishing local businesses that have invested heavily in building transparency, reliability, and customer care. Temu’s negligence is systematically poisoning trust across the entire digital economy.

Adding to the concern is the reality that Temu contributes nothing of value to Pakistan’s economy. It does not create local jobs, invest in infrastructure, or support community development. It does not partner meaningfully with local businesses nor seek to build supply chains rooted in the country’s economic fabric. Instead, it uses Pakistan as a dumping ground for surplus production, extracting profits while leaving behind weakened industries, rising consumer dissatisfaction, and a growing sense of economic disempowerment. The consequences are particularly devastating in rural and semi-urban areas, where small enterprises are often the only sources of employment and opportunity.

Other countries have recognised the existential threat posed by such platforms and acted accordingly. Indonesia moved decisively to restrict cross-border e-commerce platforms operating without local registration, citing the urgent need to protect domestic SMEs and market stability. Vietnam and Uzbekistan also took similar steps. Pakistan, however, remains on the sidelines, exposing its domestic economy to dismantling in real time without so much as a serious regulatory debate.

There is no ambiguity about what needs to be done. Pakistan must urgently introduce legislation requiring foreign e-commerce platforms to formally register within the country, maintain a physical presence for local accountability, and contribute fairly to the national tax system. These platforms must be held to rigorous consumer protection standards, ensuring that sellers, whether foreign or domestic, are equally accountable for product quality, delivery transparency, and customer redressal. Access to Pakistan’s consumer base must be conditioned upon clear obligations to invest back into the economy through local employment, training programs, and partnerships with domestic enterprises. Fair competition must be enforced as a fundamental principle, not treated as an optional standard only local businesses are forced to uphold.

Pakistani entrepreneurs should not be expected to compete against unregulated foreign platforms that contribute nothing while extracting profits from already struggling markets. If Pakistan fails to act, the cost will not simply be the closure of a few businesses, it will be the systematic dismantling of the country’s entrepreneurial backbone, the erosion of consumer trust, and the forfeiture of the very future that the digital economy was once poised to deliver.