Chinese marketplaces are killing Moldovan business
A well-known Moldovan businessman Mircea Baciu said in an interview with Logos Press that the Chinese giant TEMU undermines the market the most.
This marketplace has rapidly gained momentum: it was founded in 2022, but has already covered 50 markets, including the USA, Australia and Western Europe. Since last year, the company has been active in Moldova.
According to the businessman, this Internet player entered the Moldovan market thanks to large investments in social media and search advertising. In fact, it is buying up all the space. Temu’s expenditures have raised the price of advertising on Google (it works on the principle of an auction: the bid of the company that paid the most is displayed) by tens of percent compared to the previous year. Smaller Internet players can’t keep up and are losing customers. And in the online trading business, this is the main component in terms of costs and the development of the Internet channel.
“If Temu succeeds, because of direct access to the app, the site will have much lower marketing costs and its business model will become more sustainable, unlike Moldovan online stores,” says Mircea Baciu. – This is a big threat for local players. All Moldovan importers pay taxes and duties when importing, unlike marketplaces (both American and Chinese). Disloyal competition arises: the tax burden makes prices for the same product 30-35% higher. The matter is aggravated by the fact that the Chinese government subsidizes air delivery of Temu goods to Moldova. This also affects the price gap”.
What does Moldovan business offer?
– Introduce VAT on all goods from third countries (non-EU), regardless of the amount;
– Introduce customs duties on all goods from third countries over 150 euros (at the initial stage, remove the price threshold or unify the norms with the EC);
– Introduce mandatory registration of large trading platforms to pay VAT on all goods online;
– Unify imports of legal entities and individuals;
– Provide translations of instructions into the state language, as Moldovan importers do;
– Equalize import requirements for medicines and dietary supplements;
Today, these measures are extremely important for our market, otherwise Moldovan business, 90% of which belongs to small businesses, may be on the verge of disaster.
Source: logos-press.md https://logos-pres.md/en/news/chinese-marketplaces-are-killing-moldovan-business/
