Temu’s 300% Price Increase Following New Tax Sparks Controversy in Pakistan
ISLAMABAD, July 12, 2025 – Temu, the popular Chinese e-commerce platform, has increased its prices by up to 300% for customers in Pakistan following the government’s decision to impose new taxes on foreign online retailers. This surge in prices has sparked widespread debate among consumers and experts alike, as it raises concerns over the potential impact on Pakistan’s growing digital economy.
A pair of sunglasses that previously sold for 500 rupees on Temu is now priced at 2,000 rupees, and a thermometer that once cost 1,200 rupees has seen its price soar to 3,800 rupees. The price hikes come in the wake of Pakistan’s recent imposition of new taxes on foreign e-commerce platforms, which include an 18% sales tax on goods delivered by courier companies and a 5% fixed income tax on digital retailers.
While local retailers have welcomed the new tax regime, seeing it as a step towards leveling the playing field between domestic and foreign businesses, the price increases on platforms like Temu have left many consumers frustrated. The government introduced these measures in an effort to bring foreign e-commerce companies into the tax net and raise much-needed revenue, but experts warn that these hikes could undermine consumer purchasing power and slow the development of the digital economy in Pakistan.
Local consumers, who have flocked to platforms like Temu for affordable products, are now questioning the feasibility of purchasing goods from foreign sellers as the price hikes make them less competitive with local retailers. The price jump has particularly affected lower-income families who have turned to these platforms to save money on everyday goods like electronics, clothing, and accessories.
Experts have voiced concerns that the increased costs could dissuade Pakistanis from using e-commerce platforms altogether, especially as the country’s digital economy still makes up a small fraction of the overall retail market. While e-commerce has been growing rapidly in Pakistan, with an increasing number of young and tech-savvy consumers flocking to online shopping, many fear that the steep price increases could reverse some of the progress made in this sector.
“While it is necessary to bring foreign sellers into the tax system, this sudden increase in prices might hurt the very consumers it aims to protect,” said Shankar Talreja, Head of Research at Topline Securities. “The e-commerce market in Pakistan is still in its infancy, and such price hikes could hinder its development and discourage consumers from exploring digital shopping options.”
The government’s tax measures, introduced through the federal budget in June 2025, have already sparked concerns among e-commerce giants, with many foreign platforms now grappling with the implications of the new policy. Local retailers, on the other hand, have welcomed the tax reforms, seeing them as a necessary step to counter the market dominance of foreign e-commerce players who have operated without paying taxes in Pakistan.
While the debate over the new taxes continues, the impact of the price hikes on Pakistan’s e-commerce ecosystem remains to be seen. As local retailers brace for increased competition, the future of digital retail in Pakistan depends on whether consumers will continue to support online shopping despite rising costs.
