Shein, a Chinese founded e-commerce store, will open its first South African pop-up store at the Mall of Africa in Johannesburg. The pop-up store will be open from Friday, 2 August to Sunday, 11 August.
The store, however, will only be used as an exhibition space to showcase the latest fashion products offered by Shein. This means that customers will only be able to try on the products at the store but will still be required to order online using a discount QR code attached to the product they would like to purchase.
Tax Issues
The South African Revenue Service announced recently that it will impose a 45% import tax on goods that cost R500 or less, imported abroad through online retailers such as Shein and Temu. This tax was imposed so that local retailers could compete, however, the tax means that South Africans have to pay more in order to receive international orders.
Although both cases are valid, in that local retailers require more local business and consumers require low prices, we have to consider how the fashion industry reflects the poor South African textile industry. E-commerce businesses fail to properly pay duties on their imports and they also avoid paying VAT where it should be applied. Consumers are then left to choose between expensive local retailers and cheap international retailers, who primarily sell fast fashion.
South Africa once had a vibrant textiles and clothing manufacturing industry, but in the 1990s it was destroyed by unsupportive trade agreements and cheap clothing from the East, as can be seen through retailers like Shein and Temu. It is our government’s responsibility to redeem this once thriving industry in order to create jobs and give South Africans reliable retailers to choose from.
The Textile Industry in South Africa
The Clothing, Textiles, Footwear and Leather (CTFL) industry currently makes up around 14% of manufacturing employment in the country. This means the sector facilitates an estimated 60 000 to 80 000 jobs. Textiles are also South Africa’s eleventh largest manufactured goods exports.
There are many opportunities in the textile industry, especially when considering the number of abandoned factories throughout South Africa. To start a business in this sector one needs to have a niche and establish a business model that will work. There are many sub-industries to choose from such as manufacturing, designing and sewing clothes or selling locally made clothes in a boutique. This industry is highly competitive, however, if well executed the rewards can be great.
The South African Textile industry is no stranger to challenges, particularly competition with foreign markets. The Shein pop up store is a reminder why our textile industry needs to be revived. Foreign competition not only undercuts the work and dedication of designers and manufacturers in South Africa, it also encourages more fast fashion consumption. The government should continue to clamp down on foreign businesses operating in South Africa so that consumers can make better purchasing choices from small businesses, because their production levels can be regulated to avoid waste.
