This is according to top executives of South African fashion retailers The Foschini Group (TFG), owners of Foschini, Jet and others, and Mr Price. TFG specifically has long been petitioning the government to crack down on Temu and Shein, claiming that they are cornering too much market share away from local retailers.
“Our understanding is that the closure of that loophole has significantly slowed down some of the international pure play online into South Africa,” said TFG CEO Anthony Thunström, per Reuters.
South Africa will soon be joined by the United States, the UK, and the European Union in launching methods to remove de minimis and increase taxation of foreign ecommerce brands.
Customers have usually reacted negatively to these efforts, suggesting them to be ways to punish foreign companies and remove cheap products from the market.
“There’s nothing punitive about them,” added Thunström about the taxes, “It’s just levelling the playing field so that everybody trading in South Africa and importing products pays exactly the same duties.”
South Africa slaps Temu and Shein with hefty import taxes
Previously, companies like Shein and Temu, which sell extremely affordable products, could import packages under R500 into South Africa without having to pay 15 percent VAT and only paying a 20 percent rate.
However, in September 2024, de minimis was removed and additional taxes were imposed on these foreign retailers importing into South Africa by the South African Revenue Services (SARS).
Initially, a 45 percent tax on all orders was proposed, but this was later changed to a 20 percent tax on goods and 45 percent tax on clothing items.
Data from Cape Town-based market researcher Slant released earlier this year showed just how much Shein, specifically, was affected by the new taxes. Unlike Temu, Shein’s catalogue is mostly fashion products which have received the biggest duties.
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