Main points
- Chinese online platforms such as Temu and AliExpress are actively entering the Ukrainian market, leading to the loss of billions of hryvnias in VAT and making it difficult for local businesses to compete.
- Due to the increase in purchases by Ukrainians on foreign platforms, the Ukrainian budget is short of about 34 billion hryvnias in VAT each year.
Chinese Temu and AliExpress are killing the fashion market / press.lv
Chinese online platforms are increasingly entering the Ukrainian clothing and footwear market and are already putting serious pressure on local businesses. As a result, the state loses billions of hryvnias in taxes every year, and competition for Ukrainian retailers is becoming increasingly fierce.
How does the state budget under-receive VAT through Chinese marketplaces?
Foreign platforms actually operate in Ukraine without a physical presence – they simply sell goods directly to Ukrainians by sending parcels from abroad. This was stated by Intertop CEO Serhiy Badritdinov, writes Forbes Ukraine.
The volume of such purchases is already huge: according to market estimates, Ukrainians order foreign goods worth approximately 170 billion hryvnias every year . And this figure is growing rapidly – by more than 50% every year.
- As a result, the budget loses about 34 billion hryvnias in VAT.
- As Badritdinov explains, this money is actually “going” to the development of foreign platforms instead of working within the country.
At the same time, competition in Ukraine itself is also intensifying. In the online segment, the main players remain Rozetka, Kasta, and Epicenter , which are actively increasing their market share.
In classic retail, the situation is even more complicated. For example, brands such as Adidas and Puma are both partners and competitors, as they have their own stores and sell directly.
A special feature of the market is marketplaces. They simultaneously act as a platform for sales and as competitors for those who trade on them. Because of this, the line between partnership and competition in fashion retail is becoming increasingly blurred.
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Scandal with Chinese Shein and Temu in Europe
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A French casino director is proposing to ban Shein and Temu in Europe until the retailer laws are settled. This could temporarily protect local retailers.
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Palazzi said products sold by the two online retail giants did not meet European standards and could pose a risk to consumers. He also said the flow of products, including textiles and furniture, could mean the closure of small businesses in the region.
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The ban could be implemented by 2028 – by this time, Europe has decided to legislate regulations for imports into the region from China by 2028.