Temu’s rapid penetration into Pakistan’s e-commerce landscape has come at a cost far greater than discounted goods. While consumers were drawn in by ultra-low prices and free delivery, the platform’s operations have laid bare the gaps in Pakistan’s regulatory and enforcement systems. What began as a wave of bargain-driven enthusiasm is now prompting serious questions about policy neglect, market distortion, and the long-term impact on local digital commerce.

A sudden and sharp price hike, with some products shooting up over 300%, has become the talk of the town. From social media chatter to consumer complaint forums, Pakistanis are calling out what they see as Temu’s unjustified price inflation, especially on previously ultra-cheap items like small gadgets and household items. The change has prompted widespread disillusionment, forcing many to question if they ever needed the products they once eagerly added to their carts.

According to a detailed Profit price comparison, the same Rs 250 LED strip lights that fueled Temu’s popularity now retail at Rs 850. Wireless earbuds, which once ranged between Rs 800–1200, have jumped to Rs 1400–1800. Even basic items like silicone kitchenware and jewellery have seen price hikes of 60–100%. The reason is not subtle: Pakistan’s new e-commerce taxation regime has stripped away Temu’s unfair advantage and exposed the platform’s real cost model.

“Whatever they do, that’s like a 25% to 30% increase in their cost base,” Abrar Bajwa, founder of logistics company Zambeel, told Profit. “Temu also subsidises excessively in every market… When there’s a market-level event like this, for example a new tax, they reduce their subsidies and say the price hike is due to taxes.”

In a follow-up to Bajwa’s observation, one industry insider put it bluntly, “Temu’s pricing model was never designed to survive in a fairly taxed environment. Once those artificial discounts disappear, the platform simply becomes unremarkable, just another foreign seller, without any local trust, service, or reliability”

Pakistan’s 2025–26 federal budget introduced digital economy reforms. A 5% Digital Presence Levy specifically targets foreign platforms with no physical presence in Pakistan. Local sellers face a cumulative 4% burden through income and sales taxes. The net effect? Platforms that once sidestepped regulation are now being held to the same compliance standards as local players.

Temu’s original playbook thrived in grey zones, leveraging customs loopholes like the de minimis exemption, which allowed low-value imports to bypass duties. But as Profit notes, customs scrutiny is tightening, particularly around misclassified shipments getting through without any applicable duties being paid. That operational model is rapidly becoming untenable. And consumers are noticing.

“I had a cart full of random items on Temu,” said Sarah Ahmed, a Lahore-based marketing professional quoted in Profit. “When I saw the new prices, I realised I was just buying stuff because it was cheap, not because I needed it.” Building on Sarah’s realisation, experts suggest this isn’t just about prices – it’s about a growing fatigue with mindless consumerism that platforms like Temu have gamified.

“Consumers were conditioned to associate low prices with low stakes,” said retail strategist Sameen Khalid. “You weren’t buying things because you needed them, you were buying them because the price made it feel inconsequential. But when prices climb, that illusion collapses. Now, users are confronting the gap between what they want and what they actually value.”

The appeal of gamified, ultra-cheap shopping like spin wheels, daily check-ins, and flash sales is losing its grip. The post-tax Temu experience is no longer one of discovery, but of disillusionment. And as the glamour fades, so too does the stickiness of the platform. Industry watchers say this shake-up is long overdue.

“Platforms built on deep subsidy pools can never compete on a level playing field. They distort pricing, hurt local businesses, and make sustainable growth impossible,” said a Karachi-based e-commerce policy consultant. “Pakistan’s new taxation regime isn’t just about revenue but also about protecting the integrity of digital commerce.”

Temu’s pricing fallout is not just the end of a subsidy-fueled shopping spree but rather a reality check for Pakistan’s digital economy. The platform’s meteoric rise, built on artificial affordability and regulatory blind spots, has collided head-on with a maturing policy framework and a more discerning consumer base.
What remains is a cleaner playing field, one where platforms can no longer rely on loopholes or hype, but must compete on value, transparency, and trust. For Pakistan, this reset may just be the start of a more resilient e-commerce ecosystem, one that rewards substance over spectacle.