Temu unfazed by Brazil’s cross-border sale taxes

Two weeks ago, Temu, a U.S.-based online marketplace owned by PDD Holdings, also the parent company for the Chinese commerce giant Pinduoduo, made its debut in Brazil. Launching Brazilian Portuguese versions of its website and app, Temu began offering products priced in Brazilian reais and delivered through Correios, Brazil’s postal service. 

Simultaneously, the Brazilian Senate passed a bill slapping a 20 percent tax on low-value international purchases of up to USD 50 — a response fueled by national retailers against the rise of Asian competitors such as AliExpress, Shein, and Shopee in the country. 

Despite this new taxation, Temu remains unfazed. In an email interview with The Brazilian Report, the company stated: “The primary drivers behind our rapid expansion and market acceptance are the supply-chain efficiencies and operational proficiencies we’ve cultivated over the years. We are open to and supportive of any policy adjustments made by legislators that align with consumer interests. We believe that as long as these policies are fair, they won’t influence the outcomes of competitive business dynamics.”

Launched in the U.S. in September 2022, Temu became the most downloaded shopping app in that country the following year. It replicated that success in Europe, topping download charts in France, Germany, and the United Kingdom. Though rooted in Asia, Temu presents itself as a global platform operating in 70 markets. 

“We have expanded into ten Latin American markets, including Chile and Colombia, with Brazil being the latest,” the company said. Temu’s mission is to “make quality products accessible at affordable prices” by connecting consumers directly with cost-efficient manufacturers. 

Despite being the largest economy in Latin America, Brazil is only the company’s tenth market in the region. “By cutting out unnecessary markups, we make it easier...