Shein and Temu May Have Cost South Africa Over 8,000 Jobs, Report Finds

Global fast-fashion e-commerce giants Shein and Temu have come under scrutiny in South Africa after a new report linked their explosive growth to significant job losses in the country’s retail and manufacturing sectors. According to a study released by the Localisation Support Fund (LSF), the platforms are responsible for the loss of over 8,000 potential jobs between 2020 and 2024 in South Africa’s clothing, textiles, footwear, and leather (R‑CTFL) industries.

The findings point to a deeper economic dilemma: the allure of low-cost, fast-delivered goods from international sellers is clashing with the country’s efforts to preserve domestic industry, protect jobs, and promote inclusive economic development.

Rapid Market Penetration, Disruptive Impact

The LSF report estimates that Shein and Temu recorded a combined R7.3 billion in sales in 2024 alone, accounting for 3.6% of the total R‑CTFL retail market and an astonishing 37% of online sales in the sector. While their growth signals booming e-commerce engagement among South African consumers, the repercussions for local manufacturers and retailers have been devastating (IOL, 2025).

Between 2020 and 2024, the platforms are believed to have caused:

• R960 million in lost domestic manufacturing sales

• 2,818 lost potential manufacturing jobs

• 5,282 unrealized retail employment opportunities

This cumulative loss underscores how offshore platforms are reshaping local retail ecosystems shifting value away from domestic producers and eroding job creation pipelines.

How Did It Happen?

Experts attribute the disruption to a confluence of factors, particularly how Shein and Temu leveraged trade loopholes, data-driven sales tactics, and cost advantages in offshore manufacturing. Until 2024, the South African Revenue Service (SARS) allowed de minimis imports (under R500 in value) to enter the country duty-free and VAT-exempt. While South African retailers paid up to 45% in import duties and an additional 15% VAT, platforms like Shein and Temu circumvented these costs entirely.

This created an unfair pricing advantage, with international platforms able to undercut local retailers significantly. SARS eventually closed this loophole in late 2024, but the damage was already extensive (Zawya, 2025).

Courtney Grant, a senior researcher at BMA, noted that these platforms scaled up faster than any South African retailer in recent history: “What took local retailers 10 to 15 years to build, Shein and Temu achieved in less than five, largely by externalizing costs and bypassing trade regulations.”

Projected Future Job Losses

If growth continues unchecked, the LSF warns that South Africa could face up to 34,000 job losses by 2030. These include:

• 16,400 manufacturing jobs

• 18,300 retail jobs

• R6.2 billion in lost manufacturing output

The retail and fashion sector which historically employs tens of thousands of South Africans, particularly women and low-income workers is especially vulnerable.

South Africa’s online retail penetration rate reached 9.9% in 2024, a marked improvement from 2.4% in 2015. However, it still lags far behind the global average of 35.6% and emerging e-commerce leaders like Brazil and Vietnam. This slow digital uptake leaves local businesses with limited resources and capacity to compete with international behemoths (Mail & Guardian, 2025).

Calls for Policy Reform and Accountability

The political fallout has been swift. ActionSA, a South African political party, has called for an urgent parliamentary inquiry. They demand accountability from the Minister of Trade, Industry and Competition, the Finance Minister, and SARS leadership over why the de minimis loophole was allowed to persist for so long despite industry warnings.

Local trade unions, including the South African Clothing and Textile Workers’ Union (SACTWU), have echoed this frustration. Describing the situation as “smash-and-grab economics,” the union argued that global platforms exploited weak enforcement and tax inconsistencies to undermine domestic production.

Proudly South African, a pro-local campaign, urged consumers and policymakers alike to reflect on the long-term damage of cheap, offshore e-commerce. “Each purchase from these platforms may seem affordable,” one spokesperson said, “but it’s a silent vote against South African jobs, families, and industries” (IOL Business Report, 2025).

E-Commerce Reform vs. Protectionism

This crisis has reignited debates on how to balance open markets with local development priorities. Some argue for tighter import controls and more robust digital taxation measures to level the playing field. Others caution that overly protectionist policies could hurt consumers and discourage innovation.

However, most agree that localization policies must be central to any recovery strategy. Industry leaders are calling for:

• Increased investment in South African e-commerce platforms

• Modernization of logistics and fulfillment infrastructure

• Government procurement policies favoring local production

• Incentives for SMEs to digitize and scale sustainably

As the global digital economy continues to evolve, countries like South Africa must choose between passive consumption and proactive participation. Without targeted intervention, the next generation of retail jobs and manufacturers could be lost to foreign-owned platforms optimized for global scale but indifferent to local impact.

Conclusion

Shein and Temu’s dramatic entrance into the South African retail space has exposed vulnerabilities in trade policy, digital competitiveness, and local industrial capacity. While they represent the future of ultra-fast, low-cost e-commerce, their unchecked growth also presents significant economic and social challenges for developing nations.

As regulators, unions, industry groups, and consumers reevaluate the rules of engagement, one thing is clear: the battle for the future of South African retail is no longer in shopping malls it’s online.