Ecommerce.co.za

The competition with Temu and Shein heats up

by Ajay Lalu: Co- founder & director of Q-HOP.
In 2025, the South African ecommerce sector is at a turning point, shaped by the rapid rise of global players like Temu and Shein. Known for their competitive pricing and extensive product offerings, these platforms have gained popularity among local consumers, especially younger, budget-conscious shoppers. While their presence intensifies competition, which may benefit consumers, it also provides opportunities for local retailers to innovate and strengthen their market position.

Shein, a leader in fast fashion, has secured over 35% of the South African women's online fashion market as of late 2024, according to the Marketing Research Foundation. Chinese online retailer Temu was the most downloaded shopping app worldwide in 2024. The application counted almost 550 million downloads from the Apple App and Google Play store. Temu's main rival, Shein, was the second-most downloaded shopping app that year, with roughly 235 million downloads according to Statista.

Despite their success, these platforms have drawn criticism. Practices such as under-invoicing on low-cost imports have led to over R3.5 billion in annual tax losses for South Africa, prompting new regulatory measures by SARS. Additionally, long delivery times and questions around product quality and sustainability present opportunities for local businesses to differentiate themselves.

Strategies for local retailers to compete

1. Leverage local strengths

Local retailers can capitalise on faster delivery times and greater reliability by investing in local warehouses and efficient logistics networks. Offering culturally relevant products and showcasing locally made goods appeals to consumers’ sense of national pride.

2. Prioritise quality and ethical practices

While global platforms often prioritise affordability, local businesses can stand out by emphasising superior quality and ethical sourcing. Highlighting sustainable practices and fair labour standards, can attract socially conscious shoppers, fostering trust and loyalty.

3. Enhance the customer experience

Exceptional customer service remains a critical advantage for local retailers. Providing responsive support in multiple South African languages builds loyalty and trust. Incorporating innovative technologies like AI-driven recommendations and virtual fitting rooms creates engaging and personalised shopping experiences.

4. Build and reward loyalty

Loyalty programmes, tailored promotions and exclusive discounts can help retain customers. Establishing long-term relationships through consistent rewards fosters brand advocates and repeat purchases.

5. Collaborate and innovate

Partnerships with local suppliers and artisans can lead to unique product offerings that international competitors cannot easily replicate. Collaborating within the industry to share warehousing and logistics resources can also reduce costs and improve efficiency.

6. Adapt to regulatory changes

New import tax regulations introduced by SARS have increased the cost of international goods, offering local retailers a competitive edge. By emphasising compliance and their contributions to the local economy, businesses can further solidify consumer trust.

The road ahead

The rise of Temu and Shein highlights the immense potential of South Africa’s ecommerce market. The estimated 2025 ecommerce market size in South Africa is R400m according to research by Accenture. Local retailers can not only survive but thrive by leveraging their strengths, embracing innovation, and focusing on customer-centric strategies. While global competition encourages growth and innovation, the key for South African businesses lies in agility, creativity, and commitment to quality.

Useful resources:
Q-HOP
Q-HOP creates a uniquely convenient digital experience for retail customers by allowing them to use a mobile application to scan the barcodes of items they wish to purchase, and then pay automatically using a variety of digital payment platforms including PayPal; BitCoin; Masterpass; Zapper; SnapScan, and mobile wallets.
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