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Shein and Temu Outpace Global Retail Giants in South Africa’s Fashion Market

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China-founded e-commerce retailers Shein and Temu have rapidly captured a combined 3.6% share of South Africa’s retail clothing, textile, footwear, and leather (CTFL) market, generating sales worth 7.3 billion rand ($405 million) in 2024, according to a new report.

Shein entered South Africa in 2020, with Temu following in 2024. Both companies have disrupted the local retail sector through aggressive pricing strategies, targeted marketing, and exploiting tax loopholes that initially gave them a competitive advantage over domestic retailers. The tax loopholes were closed last year after calls from local retailers and regulators.

The Localisation Support Fund (LSF) report highlighted a decline in domestic retailers’ market share of the CTFL sector, dropping from 75.3% in 2011 to 74% in 2024. Meanwhile, established international brick-and-mortar brands such as H&M, Zara, and Cotton On collectively hold a 3.4% share.

Shein and Temu together now control 3.6% of the overall CTFL market and a significant 37.1% of South Africa’s e-commerce CTFL market. Shein alone accounts for 28% of online ladies’ CTFL sales.

Sean Mercer, principal consultant at BMA, emphasized the speed of their rise: “Those international retailers have acquired this market share over 13 years, and Shein and Temu have managed to match and surpass this in just five years.”

China’s BYD to Nearly Triple Dealership Network in South Africa by 2026

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Chinese electric vehicle (EV) manufacturer BYD plans to significantly expand its presence in South Africa, aiming to nearly triple its dealership network by next year as it pushes to grow its market share in Africa’s largest automotive market. The company currently operates about 13 dealerships in the country.

Steve Chang, General Manager of BYD Auto South Africa, told Reuters that BYD expects to increase its dealerships to around 20 by the end of 2025 and further expand to between 30 and 35 locations by the end of 2026. This expansion supports BYD’s goal of becoming a well-known brand across South Africa amid a growing interest in new energy vehicles (NEVs).

BYD launched in South Africa in 2023 with its all-electric ATTO 3 model. It now offers six models locally, including the plug-in hybrid Shark pickup, hybrid SEALION 6, and all-electric SEALION 7 SUVs introduced in April, reflecting its strategy to offer both hybrid and electric powertrains.

Sales of NEVs in South Africa nearly doubled in 2024, reaching 15,611 units compared to 7,782 units in 2023, according to the National Association of Automobile Manufacturers of South Africa (NAAMSA). Despite the low overall share of NEVs, BYD is focused on capturing early market share as the country gradually transitions toward electrified transportation.

Chang emphasized the importance of educating consumers about EVs to align South Africa with global trends. However, challenges remain, including limited charging infrastructure, unstable power supply, and relatively high import duties on EVs compared to conventional vehicles.

BYD views South Africa as a critical market in the southern hemisphere and the largest in Africa. The company’s planned expansion aims to tap into this potential and accelerate EV adoption on the continent.

South Africa to Remove Luxury Duty on Smartphones Under 2,500 Rand

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South Africa’s government has proposed removing the luxury excise duty on smartphones priced below 2,500 rand (approximately $136.37) starting from April 1, 2025. The move, announced in the National Treasury’s budget statement, aims to increase smartphone affordability for low-income households and promote digital inclusion across the country.

Currently, a 9% ad valorem excise duty is applied to smartphones, but this will only affect higher-priced devices once the proposal is implemented. This change is expected to significantly reduce the cost of entry-level smartphones, making them more accessible to a broader segment of the population.

Key Factors Behind the Proposal:

  • The proposal is part of South Africa’s efforts to encourage digital adoption, particularly among low-income groups.
  • By eliminating the duty for smartphones under 2,500 rand, the government aims to bridge the digital divide and enhance access to technology for underserved populations.
  • This initiative coincides with South Africa’s plan to phase out 2G and 3G networks by December 31, 2027, to make room for 4G LTE and 5G networks.

Concerns and Criticism:

Some critics expressed concerns that phasing out 2G and 3G networks might worsen the digital gap for low-income users, particularly those in rural areas who cannot afford the latest devices designed for faster networks. Communications Minister Solly Malatsi noted that the high cost of smartphones, partly due to the excise duties, has been a barrier to accessibility and that discussions with the Treasury were already underway to address this issue.

The move is expected to positively impact the country’s push for greater digital inclusion and accessibility in the coming years.