JOB LOSS FEARS: Cosatu calls for government ban of Shein and Temu to protect local jobs

The Congress of South African Trade Unions (Cosatu) backed a motion put forward by the Southern African Clothing and Textile Workers’ Union (Sactwu) for the government to ban international e-commerce platforms Shein and Temu, citing a 2025 study which estimated that the platforms could jeopardise up to 34,000 local jobs by 2030.

Sactwu made a presentation on day three of Cosatu’s 15th National Conference, held on Wednesday, 15 October, at Emperor’s Palace in Johannesburg, where members displayed placards showing illustrations of handbags, carpets and other textiles on the front with the numbers of local jobs under threat in each industry on the back.

The placards showed estimated job losses based on current employment numbers in existing factories, ranging from seven to 304 across textile, clothing, leather, and cosmetics industries, amounting to a total of 34,000.

“Comrades, Shein and Temu now sell more products than other global retailers in South Africa,” said Sactwu president Susan Khumalo. 

“It is causing job losses, it is also pushing down wages, pushing our benefits and our working conditions, as the clothing and textile workers union and the other workers [competing] with the cheap imports. If nothing is done, comrades, to change this, our city and our families will lose 34,000 jobs by 2030 as clothing and textile [industries], including the retailers,” she said. 

‘They’re selling cheaper and faster’

Shein, a Chinese-founded and Singaporean-headquartered e-commerce platform, first entered the South African market in 2020 and became the most downloaded shopping app by 2023. Chinese-owned Temu entered the market in 2024. Both companies were able to take advantage of low overheads due to a lack of brick-and-mortar stores, aggressive marketing, high shipment volumes and tax loopholes to undercut local retailers. 

In the second quarter of 2024, the Bureau for Economic Research found that confidence among semi-durable goods retailers of products such as textiles, clothing, footwear and leather goods fell to 38% from 68% in the first quarter, adding that retailers such as Shein “may also strain domestic clothing retailers”.

By the end of 2024, the companies captured R7.3-billion in sales, amounting to 37.1% of South Africa’s retail, clothing, textile, footwear and leather e-commerce market. 

“These companies have taken off in South Africa. They are selling cheaper and faster than anyone else. But it is putting enormous pressure on workers and our local manufacturers, including retailers and workers in the public sector as well. It’s only four years of Shein and other online shopping, but it took a huge chunk of our clothing, textile, footwear and leather, including the retail market,” said Khumalo in her presentation. 

Cosatu resolved to back the call and urged all other members to delete their Shein and Temu apps and commit to only sourcing goods from local retailers, in solidarity. 

Shein’s growth slowed to 11%

However, Shein and Temu are already undergoing significant sales downturns. This is because in 2025, the South African Revenue Service (SARS) cracked down by removing tax exemptions on imported goods priced below R500. Shein, which previously grew between 30% to 50% annually, slowed to just 11% in 2025, while Temu recorded average monthly declines of 42% in the same period. 

Independent economic strategist and board adviser Refilwe Moloto told Daily Maverick that the 34,000 figure might be outdated, given that it was calculated before the SARS tax amendments were in place. She warned an outright ban on the apps could be an uncompetitive approach that could have negative trade-offs. 

“Protectionist measures of that nature are likely to encourage, below the table, irregular and non-regulated trading. And what you really do want is for the taxpayer to be able to collect accordingly for value-added products and you’d also want to not have nefarious dealings across the border.”

She said South Africa was not unique in its predicament. Shein and Temu have had a larger impact on the US, French, and Latin American markets. In the US, Shein ranks as the third-largest online retailer. 

In addition, the local textile industry has struggled to remain competitive due to local conditions such as high energy prices, the collapse of rail transportation and administrative costs. 

“Those are structural issues that will impact the retailers themselves and the margins that they’re able to claim. It is not Shein’s fault that they operate in a country that makes their inputs cheaper, and that’s something that the government may need to address,” she said. DM