Internet11.10.2024

Temu and Shein surprise in South Africa

Shein and Temu’s primary logistics partner in South Africa has not noticed a decrease in import volumes during September, which it finds surprising given the implementation of increased taxation on small, low-value goods.

In fact, Buffalo International Logistics told MyBroadband that it experienced a surge in orders for low-value goods last month.

It has been just over one month since the South African Revenue Service (Sars) launched a round of tax adjustments on international e-commerce shipments, adding VAT to the flat 20% import duty companies like Shein and Temu paid.

Sars has committed to an overhaul of South Africa’s international e-commerce parcel classification system by 1 November 2024 to align with the World Customs Organisation (WCO) framework.

According to law firm Webber Wentzel, the adjustments are designed to discourage frequent, low-value imports that contribute to inefficiencies and unfairness in the local market.

“Customs duties are calculated based on the declared value of the goods, including any applicable shipping costs and insurance. SARS has adjusted the duty rates to make importing small, low-value items less economically attractive,” they said.

To find out whether and how much the increased tax has impacted sales, MyBroadband contacted Shein, Temu, and Buffalo Logistics.

Buffalo said that although it saw an increase in orders, it was too early to determine the tax’s effect on sales volumes, as several factors could have led to this surge.

“A decline or increase of online orders can be attributed to various factors,” said Buffalo Logistics’ commercial manager Travis Haefele.

“These include the economic climate, an increase in disposable income presumably due to the two-pot system or even the possibility that consumers may choose to save their money for the upcoming holidays.”

“This is always a busy time for us, and this year, we have spared no effort to ensure a smooth and rewarding experience for our customers,” he continued.

Shein failed to comment by the time of publication.

Temu declined to comment, saying it could not disclose financial information separate from its parent company, PDD Holdings.

Temu’s decline

Data from Similarweb and Google Trends shows that Temu has seen a rapid decline in user traffic and search popularity in South Africa over the past few months.

This data concerns the months leading up to 1 September, so it does not reflect the implementation of the new tax laws.

It compared the online traffic of both Temu and Shein for the past year leading up to the end of August this year.

Despite its aggressive entry into the South African market, Temu’s traffic has decreased monthly.

Temu’s waning popularity is also reflected in Google Trends data for searches in South Africa.

Google Trends showed that searches for “Temu” started becoming more common in South Africa from early January 2024 and peaked in March 2024.

After that, searches receded to the same level as queries for “Amazon” in the weeks after the launch of its local marketplace in South Africa in May 2024.

Shein’s search popularity in South Africa peaked in November 2023 before declining slightly. However, it has maintained a higher popularity search popularity than Temu and Amazon.

While Temu has established a foothold in South Africa, it faces tough competition not only from its Chinese counterpart but also from Takealot.

Overall, Takealot has remained the most-searched-for e-commerce player in South Africa over the last year, with Amazon only briefly surpassing the country’s leading online store in the week of its Amazon.co.za launch in early May.

The graphs below show Temu’s decline in online traffic in South Africa and how it compares to Shein, according to data tracked by Similarweb, as well as how Temu’s Google Search popularity compares with Shein, Takealot, and Amazon in South Africa.

Temu vs Shein online traffic — Similarweb statistics
Google search trends for Takealot, Temu, Shein, and Amazon in South Africa
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