Shein, Temu face uncertain times in South Africa, EU, other markets amid high-tariff push

South Africa now charges an import duty of 45 per cent plus VAT on all clothing to close loopholes allegedly exploited by Shein and Temu

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Several retailers in South Africa have accused Shein and Temu of abusing the country’s tariff rules. Photo: Shutterstock

Published: 9:00pm, 19 Jul 2024

Some consumers in South Africa are looking to abandon popular low-cost online retailers Shein and Temu, according to recent social media posts, after the country’s revenue authority this month enforced higher tariffs on all imported clothing to close loopholes allegedly exploited by international e-commerce platforms.

The South African Revenue Service on July 1 started charging an import duty of 45 per cent plus value-added tax (VAT) on all clothing, up from a tariff of 20 per cent previously imposed on low-value parcels, as part of efforts to stop Chinese-backed shopping platforms like Shein and Temu from undercutting domestic retailers.

Several local retailers have accused those platforms of abusing a so-called de minimis rule, which charged an import duty of 20 per cent and zero VAT on clothing parcels valued at under 500 rand (US$27.44), according to a report on Wednesday by local media News24.

They claimed Shein and Temu had been breaking up larger orders into smaller packages that cost below 500 rand. After getting the lower tax, the orders are combined again before these are shipped to buyers.

Neither Shein nor PDD Holdings-owned Temu immediately replied to a request for comment on Friday. PDD also operates Pinduoduo in China.

The South African Revenue Service has introduced higher import taxes on smaller clothing items bought from international e-commerce platforms. Photo: Shutterstock

Shein user Lisa, who goes by the handle ofunwa109 on short video site TikTok, on July 4 posted a photo of her tax bill of 2,038.14 rand for an order worth 2,700 rand, with the caption “Bye Shein”.