Huge retail shake-up

CHINESE GIANTS: TEMU, SHEIN GRAB MARKET SHARE FROM SA COMPANIES

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BOOMING. The low-cost business models of Shein and Temu have upended retail globally.

(Picture: Bloomberg)

The disruption from Chinese e-commerce players Shein and Temu has been profound.

The aggressive, low-cost business models of these operators have upended retail globally.

This is perhaps one reason the share prices of fashion retailers on the JSE have remained depressed.

So far, shares in Mr Price are down 25%, The Foschini Group (TFG) by 31% and Truworths by 46%.

Woolworths, bolstered by its sizeable Food business, is “only” down 15%, while Pepkor is 10% lower. In June, consultancy BMA published a research report commissioned by the Localisation Support Fund, which estimated that last year, “Shein and Temu collectively achieved approximately R7.3 billion in sales”.

This accounts for nearly 4% of the total clothing retail market and “37% of the sector’s e-commerce sales”.