Online retailers Shein, Temu could cost South Africa R6.2bn by 2030

Localisation Support Fund warns over threat posed by offshore e-commerce retailers

- SIPHELELE DLUDLA

THE Localisation Support Fund (LSF) has warned about the looming threat posed by offshore e-commerce retailers (OERs) to South Africa's job market, despite regulatory efforts intended to mitigate this issue.

As the South African economy grapples with high unemployment rates of 32.9%, the stakes have never been higher.

A recent study conducted by BKM Analysts (BMA) and commissioned by the LSF revealed that at least 2 800 manufacturing jobs projected for 2024 did not materialise while 5 000 retail jobs were displaced due to the dominance of fast-fashion international giants, Shein and Temu.

Presenting the findings of the study on Tuesday, BMA principal consultant, Sean Mercer, highlighted the impact that platforms such as Shein and Temu have had on the retail clothing, textile, footwear, and leather (R-CTFL) industry.

Mercer said the retail sales figures of these companies skyrocketed to over R7 billion in 2024, adding that this explosion in sales raised serious concerns about the sustainability of local industries when confronted with aggressive foreign competition.

While total retail sales in the R-CTFL industry have surged from R117bn to R203bn between 2011 and 2024, with an average annual growth rate of about 4.3%, the e-commerce sector has experienced an even more remarkable climb.

The 64-page report showed that e-commerce's share of the total retail market has risen from a mere 2.4% in 2015 to an estimated 10% in 2024, with projections suggesting that this figure could climb even higher to 16% by 2030.