{"id":573479,"date":"2024-12-24T15:00:00","date_gmt":"2024-12-24T13:00:00","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=573479"},"modified":"2024-12-24T15:28:35","modified_gmt":"2024-12-24T13:28:35","slug":"south-africas-e-commerce-boom","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/internet\/573479-south-africas-e-commerce-boom.html","title":{"rendered":"South Africa’s e-commerce boom"},"content":{"rendered":"\n

This past year has been a significant one for South Africa’s e-commerce industry, which is also expected to comprise 10% of all retail<\/a> in 2025.<\/p>\n\n\n\n

However, some local players may struggle to find a silver lining in a year of disruptive events.<\/p>\n\n\n\n

The disruptions have primarily been due to the entry of overseas players such as Amazon and the increased popularity of low-priced platforms, such as Temu and Shein.<\/p>\n\n\n\n

The Competition Commission’s chief economist, James Hodge, highlighted this dramatic change in the watchdog’s Intermediation Platforms Market Inquiry report that was released in July 2023.<\/p>\n\n\n\n

Hodge noted that when the report was being created, the focus was on market dynamics.<\/p>\n\n\n\n

The report found Takealot to be the market leader with a dominant share of online transactions \u2014 defined as more than 35%.<\/p>\n\n\n\n

However, much has changed since then, with Competition Commissioner Doris Tshepe warning the government to employ all its tools to create a fairer playing field in the e-commerce sector.<\/p>\n\n\n\n

The irony is that this statement followed a submission by Takealot \u2014 identified as the dominant e-commerce firm in South Africa in 2023 \u2014 to the South African Revenue Services with several demands that should be imposed on foreign online shopping platforms.<\/p>\n\n\n\n

These included requiring all foreign-owned e-commerce businesses to establish local offices and distribution centres.<\/p>\n\n\n\n

Whereas many perceived Amazon’s launch as underwhelming, the rise of platforms like Temu and Shein has placed significant pressure on local players.<\/p>\n\n\n\n

This ties into the affordability of the products sold on these platforms, making online shopping more appealing to South African consumers.<\/p>\n\n\n\n

These platforms had such a significant impact on South Africans that many protested against Sars’ decision<\/a> to increase import taxes on low-value imports.<\/p>\n\n\n\n

This followed Temu and Shein’s exploitation of a 2007 concession<\/a> that allowed for a 20% flat duty with no VAT on all parcels with a value under R500.<\/p>\n\n\n\n

A report by the Marketing Research Foundation<\/a> found that Shein dominated South Africa’s second most popular e-commerce category: clothing.<\/p>\n\n\n\n

Shein held a 35% market share in women’s clothing, dominating the second and third-place stores, Mr Price (7%) and Superbalist (3%)<\/p>\n\n\n\n

A MyBroadband analysis<\/a> in 2024 found that a basket of women’s clothing from the most affordable South African online clothing retailer, Clothing Junction, cost R320.<\/p>\n\n\n\n

The same basket from Shein cost R259. For reference, the baskets of platforms known to sell trendy items, such as Woolworths or Cotton On, cost R768 and R890, respectively.<\/p>\n\n\n\n

As a result of increased competition and economic pressure from Temu and Shein, three online stores in South Africa were shut down or sold within months.<\/p>\n\n\n\n

First Takealot sold its fashion retailer Superbalist<\/a> on 1 September after rumours that Superbalist was for sale<\/a> emerged earlier in the year.<\/p>\n\n\n\n

A few days later, low-cost, off-brand Chinese tech importer Snatcher confirmed it had ceased all operations and entered voluntary liquidation after more than eight years in business.<\/p>\n\n\n\n

Shein and Temu’s most recent victim was clothing retailer Zando<\/a>, an online store that had operated in South Africa for twelve years before parent Jumia announced the local operation would be shuttered.<\/p>\n\n\n\n

While the entry of platforms like Temu and Shein has hurt South African businesses, many consumers are grateful for the more affordable pricing.<\/p>\n\n\n\n

It is, therefore, no surprise that the Competition Commission has said its focus has shifted to international players to ensure the South African business environment is fair for all participants.<\/p>\n","protected":false},"excerpt":{"rendered":"

2024 has been a significant year for the South African e-commerce sector. However, local players have been put under extreme pressure.<\/p>\n","protected":false},"author":341175,"featured_media":554553,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[18],"tags":[723,3222,11165,80653,995,87953],"class_list":["post-573479","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-internet","tag-amazon","tag-competition-commission","tag-e-commerce","tag-shein","tag-takealot","tag-temu"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/573479"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341175"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=573479"}],"version-history":[{"count":6,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/573479\/revisions"}],"predecessor-version":[{"id":576878,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/573479\/revisions\/576878"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/554553"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=573479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=573479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=573479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}