Explosive growth of the company behind Temu and Shein’s success in South Africa

Specialist China-Africa import and customs clearance provider Buffalo International Logistics has grown substantially in recent years, increasing its staff complement from around 33 people in 2022 to 127 today.

Data from LinkedIn shows the company grew its operations staff by 78% in the past year and doubled the number of staff in support roles.

It also increased the number of HR-related roles five-fold in twelve months, while the number of sales staff increased by 11%.

Buffalo has become the go-to logistics provider for online retailers that import goods from China, like Shein and Temu, by providing fast shipping and quick customs clearance.

South African clothing retailer Zando also recently partnered with the company to be its logistics provider for Zando Global, an import service similar to Shein.

Although Buffalo was founded in 2017, its stratospheric rise only started recently — over two years after Shein entered the South African market in 2020.

While Shein uses two logistics providers in South Africa, Buffalo International Logistics is a cornerstone of its success.

Shein’s popularity exploded in 2023 — the same year Buffalo Logistics received its Level 1 Authorised Economic Operator (AEO) accreditation from the South African Revenue Service (SARS).

The certification was issued for five years and, according to SARS, grants it access to expedited processes, fewer and faster inspections, exemptions from certain customs supervision, and reduced security deposits.

“We are the logistics company with the lowest inspection rate and the highest pass rate in the Johannesburg airport customs over the years,” Buffalo’s website states.

Buffalo explains that it ships products in bulk to its sorting centre in South Africa and uses local couriers to do fast last-mile deliveries.

It has integrated with South African customs, local banking systems, and several express companies. It also owns a fleet of 300 vehicles.

The company grew so rapidly that it bought Lufthansa’s old South African headquarters in October 2022 and turned it into a 25,000-square-meter sorting centre.

Buffalo says it has a comprehensive storage area of 35,000 square meters, which includes its integrated warehouses and a bonded warehouse of 6,500 square meters.

Buffalo also said that by 2022, it had the highest local customs clearance volume in South Africa, completing five times DHL’s volume.

The company currently has a sole director — Ying Jiang — the same person who registered it in 2017. According to the CIPC’s public data, Jiang has a South African identity number and is 63 years old.

Buffalo International Logistics staff complement statistics from LinkedIn

Buffalo’s rapid growth has not been without controversy.

Industry associations and other e-commerce players have accused Temu and Shein — or its logistics provider — of not accurately declaring the contents of parcels.

Clothing imports attract a very high duty in South Africa. Therefore, declaring orders incorrectly may help the importer and end customer pay less and undercut local retailers.

National Clothing Retail Federation executive director Michael Lawrence said they flagged suspicious practices by Temu and Shein with  SARS.

Lawrence said it may be that their logistics provider is not declaring parcels accurately, rather than Shein and Temu trying to dodge tax.

He said that, according to tests they conducted, the taxes applied to packages can amount to as little as 10% of the item’s value.

This is much lower than the 30% to 45% tax and VAT on imported clothing levied to protect local manufacturers against cheap exports that could threaten their businesses.

Shein and Temu denied dodging tax or declaring the contents of parcels incorrectly.

“Customs duty is payable on every order, and prices displayed on the Shein website include applicable taxes,” a spokesperson for the company told MyBroadband.

Temu works differently, with customers charged taxes and duties only after their parcel has landed.

This is because Temu is a general marketplace, similar to Takealot or Amazon, whereas Shein only sells clothing.

“Temu reiterates that it complies with all relevant legislation and regulations and does not evade taxes,” the e-commerce platform told MyBroadband.

MyBroadband contacted Buffalo International Logistics for comment, but it did not respond by publication.

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Explosive growth of the company behind Temu and Shein’s success in South Africa