Mthobisi Nozulela|Published
Online global retailers Temu and Shein could face a fight to remain in the South African market after COSATU resolved to campaign for a ban on the platforms.
The resolution was adopted at COSATU’s 15th National Congress, with the federation arguing that restricting the platforms would help protect local businesses and stimulate job creation.
The resolution follows a recommendation by the Southern African Clothing and Textile Workers’ Union (SACTWU) that the online retailers be banned in South Africa, amid concerns about the impact of cheap imported goods on local manufacturers and retailers.
"Delegates endorsed the resolution to campaign for the banning of offshore online shopping giants Shein and Temu to facilitate support for the local market, in turn stimulate job creation," the union said.
Thousands of potential jobs not created
IOL previously reported that As South Africa continues to battle the scourge of unemployment, a report by the Localisation Support Fund (LSF) found that fast-growing Chinese online retailers Shein and Temu may have cost the country more than 8,000 potential jobs over the past five years.
The report examined the effect of offshore e-commerce retailers on South Africa's clothing, textile, footwear, and leather (R-CTFL) industry.
"In 2024, Shein and Temu collectively achieved approximately R7.3 billion in sales, accounting for 3.6% of the total R-CTFL market and 37% of the sector’s e-commerce sales," the report noted.
"This rapid growth has come at a notable cost to the local economy. The estimated displacement is estimated to include R960 million in lost local manufacturing sales, 2,818 associated manufacturing jobs that may have materialised, and 5,282 unmaterialised retail jobs from 2020 to 2024".
According to the report, this disruption is largely driven by Shein and Temu’s highly digitised and cost-efficient business models, which allow them to offer a wide variety of products at ultra-low prices that local retailers struggle to match.
"Their business models also leverage significant cost advantages through de minimis trade allowances, offshore manufacturing, low shipping costs, and data-driven consumer targeting," the report continued.
"Despite growth in e-commerce penetration in South Africa—from 2.4% in 2015 to 9.9% in 2024—local penetration remains significantly below the global average (35.6%) and those of comparator emerging markets such as Brazil and Vietnam.
"This indicates structural and logistical challenges, including limited last-mile delivery infrastructure and entrenched consumer habits favouring physical retail
IOL Business
mthobisi.nozulela@iol.co.za