South Africa’s largest trade union federation, the Congress of South African Trade Unions (COSATU), has backed a campaign to ban Shein and Temu over concerns that the online shopping platforms are hurting local businesses and putting jobs at risk.
The decision was taken at COSATU’s 15th National Congress, following a recommendation by the Southern African Clothing and Textile Workers’ Union (SACTWU).
The unions argue that restricting the platforms would help local clothing manufacturers and retailers compete with cheaper imported goods and create more jobs.
However, the National Clothing Retail Federation of South Africa has warned against an outright ban, saying the government should address the wider problems affecting competition in the retail industry.
Shein and Temu’s growing market
Shein entered South Africa in 2020, while Temu followed in 2024. Both platforms have attracted customers with low prices, a wide range of products, and aggressive online marketing.
Their growth has raised concerns among local businesses, particularly clothing and textile manufacturers that struggle to compete with the prices of imported goods.
A study commissioned by the Localisation Support Fund (LSF) found that Shein and Temu recorded combined sales of about R7.3 billion ($444.1 million) in South Africa in 2024.
The study estimated that the platforms accounted for 3.6% of the country’s retail clothing, textile, footwear, and leather market. They also represented 37% of online sales in the sector.
Both companies were founded in China and maintain large manufacturing operations there. Their business models allow them to sell a wide range of products directly to customers, often at prices that local retailers find difficult to match.
Thousands of jobs could be affected
The impact on local employment is a major reason behind the calls for a ban.
According to the LSF study, the growth of offshore online retailers was linked to an estimated R960 million ($58.4 million) in lost local manufacturing sales between 2020 and 2024.
The study also estimated that 2,818 manufacturing jobs and 5,282 retail jobs that might otherwise have been created were displaced during the period.
It warned that the impact could grow over the coming years. Under its worst-case scenario, more than 34,000 jobs in the retail and manufacturing parts of the clothing and textile sector could be displaced by 2030.
The figure is a projection, not a count of jobs already lost.
The findings have added to pressure on the government to protect local businesses from competition with offshore retailers.
Retail industry warns against a ban
Despite these concerns, the National Clothing Retail Federation of South Africa believes an outright ban may not be the best solution.
Speaking to CapeTalk, the federation’s executive director, Michael Lawrence, described a ban as a one-sided response to a problem with several causes.
He said the government should take a closer look at how Shein, Temu, and other offshore retailers operate in the country and whether they follow the same rules as local businesses.
Lawrence also warned that banning the platforms could reduce competition in the retail market.
However, he acknowledged that the concerns about jobs were reasonable and that the growth of offshore online retailers had affected employment in both manufacturing and retail.
Questions over taxes and import duties
In August 2024, the South African Revenue Service (SARS) announced that value-added tax (VAT) would apply to imported goods worth less than R500 ($30.42).
The change followed concerns that some importers selling goods through e-commerce platforms were not paying the required VAT and customs duties.
Before the change, certain low-value imports benefited from tax treatment that gave offshore sellers an advantage over local retailers.
Lawrence said the industry was still unsure whether the changes had solved the problem.
He told CapeTalk that some invoices he had seen raised questions about whether the correct taxes and duties were being paid. He acknowledged, however, that the invoices might not show the full amounts eventually paid.
The concerns have increased calls for better enforcement of existing rules rather than relying only on a ban.
Consumers also face a difficult choice
Shein and Temu offers South Africans an affordable way to buy clothing and other products at a time when household budgets are under pressure.
Online shopping can also save consumers the time and transport costs involved in travelling to physical stores.
Lawrence said consumers were free to decide where to spend their money. He added that households should not be expected to bear the cost of problems that businesses and government could address through better policies.
He also raised concerns about consumer protection, noting that customers may find it harder to understand or enforce their rights when buying from offshore sellers than when dealing with local retailers. Meanwhile, South Africa’s online shopping market continues to grow.
The LSF study estimated that e-commerce penetration rose from 2.4% in 2015 to 9.9% in 2024. However, this remained below the global average of 35.6% and levels recorded in countries such as Brazil and Vietnam.
The study pointed to delivery challenges and consumer habits that favour physical shops as some of the factors affecting the local market.
Government yet to announce a ban
COSATU’s decision adds weight to the campaign against Shein and Temu, but it does not mean the platforms have been banned.
The union federation is calling for a ban, while the retail industry wants the government to examine tax compliance, competition, and consumer protection more closely.
The government now faces competing demands: protecting local jobs and businesses while preserving consumer choice and access to affordable goods.
How it responds could shape the future of cross-border online shopping in South Africa.