🛍️ Shein's Pop-Up Store in Johannesburg
Shein is opening its first South African pop-up store at the Mall of Africa in Johannesburg. The store will be open from August 2 to August 11. Customers can visit the store from 14:00 to 20:00 on Friday, August 2, and from 09:00 to 21:00 from Saturday, August 3, to Sunday, August 11. Visitors can try on the latest fashion and lifestyle products, but purchases must be made online with a discount available in-store.
📉 Retail Impact and Confidence Drop
Shein and fellow online retailer Temu are shaking up South Africa's retail space with their low prices. The Bureau for Economic Research's latest Retail Survey for Q2 2024 shows confidence among semi-durable goods retailers dropped from 68% to 38%. This decline follows weak sales in Q1 2024, partly due to a high base period from the 2023 Rugby World Cup. Online competitors like Shein and Temu are making it hard for local clothing retailers to compete.
⚖️ Tax Controversy
Local retailers have accused Shein and Temu of violating tax laws to undercut prices. They claim these companies misuse the de minimis rule to get parcels under R500 through customs with lower duties and no VAT. They allege that larger orders are split into smaller packages to avoid higher taxes, which hurts local businesses. The National Clothing Retail Federation's Michael Lawrence said, "These companies are not paying duties on their imports and are avoiding paying VAT where it should be applied."
💸 SARS and Legal Compliance
SARS Commissioner Edward Kieswetter stated that the tax authority is targeting Shein, Temu, and other online retailers to ensure proper tax compliance. Kieswetter said the state lost over R3 billion in unpaid taxes and is working to address the issue. Temu insists it follows local tax laws, while Shein claims its affordable prices come from its tech-based business model and flexible supply chain, not from dodging taxes. The controversy continues as local retailers demand stricter enforcement.
Is Shein’s new store strategy good for South Africa?
