Local vs. Global: What is driving South Africans to shop on Shein and Temu?

It is clear from available retail statistics that many South Africans now prefer international clothing retailers such as Shein and Temu over local clothing retailers.

The perception that international retailers offer ‘unbeatable prices’ is largely driven by their low pricing strategies that many local retailers find difficult to match. Their competitive prices are likely driven by very large economies of scale and low-cost international supply chains, while air freight logistics also help to keep unit costs low. In addition, not having any stores, warehouses or staff in South Africa means that these retailers do not have any local infrastructure overheads as part of their cost structure. This alone allows them to sell items at prices that are often 30 to 50 percent lower than local equivalents.

In addition to competitive pricing, international online retailers like Shein and Temu attract South African consumers by offering a frictionless shopping experience. Their sleek mobile apps, AI-driven product recommendations, seamless checkout and delivery processes, and aggressive social media marketing have set a new standard for convenience and engagement in online retail. This apparently ‘instant gratification infrastructure’ has a particularly strong appeal to younger, mobile-first consumers who value speed and convenience over brand loyalty[1].

Temu and Shein have huge advertising budgets which allows them to flood digital channels with paid promotions, especially on social media platforms like Google, Facebook and TikTok. Local retailers simply cannot compete with their ad spend, which gives these international brands a disproportionate share of consumer attention[2].

Finally, there are certain tax loopholes and import advantages which work in favour of these international platforms. Until mid-2024, Shein and Temu benefited from a South African tax loophole known as the de minimis rule which exempted parcels under R500 from VAT and imposed only a 20% import duty. In contrast, local retailers faced a significantly heavier burden, with up to 45% customs duty plus 15% VAT, making it difficult to compete on price. This loophole gave Shein and Temu a clear pricing advantage, making their products especially appealing to price-sensitive South African consumers. To level the playing field, SARS implemented stricter import tax regulations in July 2024, requiring standard VAT and duties to be applied to all Shein and Temu orders, effectively closing the gap that had previously favoured international retailers [2].

Considering the factors outlined above, South African consumers are not merely bargain-hunting, they are responding to a broader global shift in retail dynamics, where convenience, digital engagement, and perceived value increasingly outweigh traditional loyalty to local brands. Shein and Temu have capitalized on this shift by offering affordable fashion, seamless shopping experiences and highly personalized digital interactions, elements that many local retailers have yet to fully replicate.

To regain market share, South African retailers must innovate, localize and digitize, or risk being left behind in an increasingly competitive and fast-evolving e-commerce landscape.

References:
[1] Shein and Temu disrupt South African retail
[2] How Shein and Temu changed the SA shopping landscape

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