By Siyanda Mthethwa
JOHANNESBURG (Reuters) -China-founded e-commerce retailers Shein and Temu have captured a combined 3.6% share of South Africa’s retail, clothing, textile, footwear and leather (CTFL) market, accounting for 7.3 billion rand ($405 million) in sales in 2024, a report showed on Tuesday.
Shein entered the market in 2020, followed by Temu in 2024. Both have disrupted the local retail landscape through aggressive pricing, strategic marketing, and using tax loopholes that initially gave them a competitive edge over local retailers.
Their appeal to price-sensitive consumers has impacted local retailers, who urged regulators last year to close the tax loophole, which eventually ended last year.
The Localisation Support Fund (LSF) report found that domestic retailers’ market share of CTFL declined from 75.3% in 2011 to 74% in 2024. Meanwhile, international brick-and-mortar brands like H&M, Zara, and Cotton On hold a combined 3.4% share.
Shein and Temu now command a combined 3.6% share of the CTFL market, and 37.1% of South Africa’s e-commerce CTFL market, with Shein alone accounting for 28% of online ladies’ CTFL sales.
“Those (international)retailers have acquired this market share over a period of 13 years, and Shein and Temu have managed to match and surpass this in just a five-year period,” said Sean Mercer, principal consultant at consulting firm BMA.
($1 = 18.0270 rand)
(Reporting by Siyanda Mthethwa; Editing by Nqobile Dludla, Alexandra Hudson)
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