Offshore e-commerce retailers battering our industries to extinction - Proudly SA

THE inaugural report into the impact of foreign owned e-commerce retailers titled: Offshore e-Commerce Disruption in South Africa, makes for grim reading.

- EUSTACE MASHIMBYE

This report, commissioned by Proudly SA and painstakingly compiled by the Localisation Support Fund (LSE), eloquently illustrates the deleterious impact that offshore e-commerce retailers have had on the South African economy and lays bare how these conglomerates have displaced the country’s manufacturing capabilities and cannibalised thousands of jobs in the retail, clothing, textile, footwear and leather (R-CTFL) industries which cumulatively employ over 212 000 people.

Over the past five years, offshore e-commerce retailers have grown rapidly in South Africa’s R-CTFL e-commerce space and fundamentally disrupted established local value chains.

In 2024, Shein and Temu collectively achieved approximately R7.3 billion in sales, accounting for 3.6% of the total R-CTFL market and 37% of the sector's e-commerce sales.

This rapid growth has come at a notable cost to the local economy.

The estimated displacement includes R960 million in lost local manufacturing sales, 2 818 associated manufacturing jobs that may have materialised, and 5 282 unmaterialised retail jobs from 2020 to 2024.

What makes the findings of this report more disturbing is when it is juxtaposed against the commencement of the crippling 30% tariffs set to take effect on August 7 that the Donald Trump administration slapped on South African exports to the United States, which are expected to result in a jobs bloodbath in the foreseeable future.