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TikTok Shop Increases Fees for Sellers: A New Challenge for Online Businesses in Vietnam

Since mid-July 2025, TikTok Shop has implemented a significant service fee increase for sellers on its platform, with rates now multiple times higher than before. The new platform commission fees for standard sellers have risen from 4% to 10-12% for fashion items, 4-12% for home and lifestyle products, and 8.5-12% for groceries, health and beauty, and baby care products.

When combined with the 5% transaction fee on every successful delivery, sellers on TikTok Shop could be paying up to 17% of their revenue, excluding other costs such as promotions and shipping.

This move comes not long after other major platforms like Shopee made similar adjustments in their fee structures.

The Impact of Fee Increases and the Evolution of the E-commerce Market in Vietnam

While it is a normal business practice for e-commerce platforms to adjust service fees to optimize operations and profits, the near-simultaneous fee increases by large platforms, especially foreign-invested enterprises, have sparked discussions about market structure changes and the evolving “rules of the game.”

From Subsidies to “Locking” the Ecosystem

The initial entry phase of large e-commerce platforms into the Vietnamese market was marked by massive subsidy and promotion campaigns. Free shipping programs and countless vouchers were offered to attract a vast number of users and sellers in the shortest time possible. While costly, this strategy established the platforms as almost indispensable to the business operations of millions of sellers.

Once they had gained market share and created seller dependency, the platforms began consolidating their positions by building a closed-loop ecosystem of support services. One of the most noticeable manifestations of this shift is the loss of freedom for users to choose their preferred logistics providers.

Instead, the platforms’ algorithms automatically assign a “strategic” logistics company, often a subsidiary or close partner of the platform. Similarly, some platforms have established their own e-wallets and do not allow connections with other e-wallets, funneling users toward their in-house payment services.

This change has essentially transformed the role of the platforms from mere intermediaries to comprehensive service providers, where they control the most critical stages of the transaction process.

The draft of the Electronic Commerce Law being developed and consulted by the Ministry of Industry and Trade is expected to provide solutions for a balanced competitive environment.

Legal Framework Refinement to Keep Pace with the Digital Economy’s Growth

Experts assess that when a platform controls both user volume and critical support services like logistics and payments, it gains significant market power. In this context, adjusting platform fees becomes a predictable business move.

Sellers, already dependent on the platform’s vast user base, have little choice but to accept the new fee structure. Switching to another platform entails the risk of losing revenue and established customers.

Over time, this dynamic can have multidimensional impacts. As business costs on the platform rise, the profits of sellers (mostly small and micro-enterprises) will be affected. Many sellers on e-commerce platforms have shared that to maintain operations, they are considering increasing product prices, ultimately passing the cost burden to consumers.

This reality has also been observed in international markets, where competition authorities in various countries have investigated and penalized large tech corporations for similar behaviors, such as leveraging their dominant position to favor “internal” services or impose unfavorable transaction conditions on partners.

This underscores the global challenge of maintaining a balanced competitive environment in the e-commerce sector.

Against this backdrop, refining the legal framework to align with the growth of the digital economy is imperative. The draft of the Electronic Commerce Law being developed and consulted by the Ministry of Industry and Trade is expected to provide solutions for the issues mentioned above.

Among the proposed regulations, the law suggests that large e-commerce platforms “should not force sellers and buyers to use the payment services of a single provider or the logistics services of a single provider without justifiable reasons.”

While this regulation restores choice to sellers and buyers, platforms might circumvent it by allowing users to choose between only two preselected providers instead of granting them full freedom to select any provider.

The leader of a domestic logistics company suggested that the regulation should be amended to state, “Do not obstruct or restrict users from exercising their right to choose a payment service provider and a logistics service provider.” This proposed wording carries a broader meaning than the current draft and is also in line with Article 6.6 of the European Union’s Digital Markets Act.

Another regulation in the draft law states that organizations providing logistics services to support e-commerce have the responsibility to “Have mechanisms and measures to check information, dossiers, and documents accompanying goods before transporting them; refuse to transport goods on the list of prohibited business lines, refuse fake goods, goods of unknown origin, or goods that violate other provisions of law.”

However, in reality, requiring the transporting entity to self-determine the legality of goods and systematize the types of invoices and accompanying documents is incredibly challenging. Each type of good has unique legal requirements for accompanying documents, and these documents can be diverse and complex. Transport companies lack the specialized expertise to ascertain the legality of these documents.

Therefore, some logistics experts suggested amending this regulation: “Organizations providing logistics services to support e-commerce have the responsibility to a) Have mechanisms to check the contents of goods before transporting them and must refuse to transport goods on the list of prohibited business lines, refuse fake goods, goods of unknown origin, or goods that violate other provisions of law if discovered during the service provision.”

Additionally, to address the issue of competition through financial might in the initial stages, experts suggested that the draft law should include a regulation prohibiting large platforms from “selling goods or providing services at a total cost that leads to or is likely to lead to the elimination of competitors.” This measure aims to prevent “money-burning” strategies aimed at capturing market share, which can distort the market and eliminate smaller enterprises.

Such regulations are a global trend to curb unfair competitive practices by dominant platforms.

For instance, the European Union’s Digital Markets Act (DMA), in Article 6, outlines a list of obligations that “gatekeeper” platforms must adhere to, including a ban on self-preferencing, i.e., treating their products or services more favorably than those of competitors on the same platform.

Similarly, South Korea is promoting draft laws to regulate the behavior of large platforms, with a particular focus on self-preferencing and other practices that hinder competition. Banning the sale of goods below total cost can be seen as a tool to enforce the principle of non-self-preferencing, preventing platforms from using their financial might to unfairly eliminate competitors.

According to experts, the emergence of a clear legal framework is not intended to hinder the development of platforms but to ensure the market operates transparently and sustainably. This not only protects the interests of small businesses and consumers but also contributes to the long-term, healthy growth of Vietnam’s entire digital economy.