Growing consumer appetite for online shopping is fuelling a fresh crisis in the clothing industry, with a new report warning that more than 34,000 local jobs could be lost by the end of the decade as offshore e-commerce giants tighten their grip on the market.
According to a study commissioned by the Localisation Support Fund and conducted by research firm BMA, fast growing platforms including Shein and Temu are rapidly eating into the market share of local retailers and manufacturers, pulling billions in consumer spending away from domestic value chains.
In 2024 alone, the two offshore platforms raked in an estimated R7.3bn in SA sales, more than a third of all online clothing purchases. According to the report, e-commerce sales climbed from just 2.4% of the market in 2015 to nearly 10% last year.
The report said that more than 8,000 local jobs, the majority in retail and the rest in manufacturing, had effectively been lost because of the platforms’ rise. That number could quadruple by 2030 if growth continues unchecked.
The threat comes as SA is beginning to rebuild its clothing and textile sector. Since 2019, government and industry players have worked to implement the R-CTFL (Retail, Clothing, Textile, Footwear and Leather) Masterplan — a broad-based strategy to revive local manufacturing and boost employment through increased local sourcing.
But the arrival and dominance of ultra-fast fashion platforms have complicated that mission. While Shein and Temu offer low prices and seemingly endless variety, their success is powered by global supply chains that exclude SA manufacturers almost entirely.
“These job losses stand in stark contrast to the progress made under the R-CTFL Masterplan, a social compact adopted in 2019 to boost local sourcing and drive employment growth across the value chain. The challenge now is to safeguard those gains and ensure the next phase of e-commerce growth supports, rather than undermines, SA’s industrial ambitions.”
To assess the full effect, the report modelled three scenarios based on how quickly Shein and Temu grow. In the most aggressive scenario, SA could lose out on more than R6.2bn in local manufacturing sales, with as many as 18,300 factory jobs and 16,400 retail positions displaced by 2030.
“The surge in the market of cheap goods from these e-commerce offshore platforms is depressing the prices that local retailers can charge. This is smash-and-grab economics, an easy way to come into a country, grab what they can, and leave all the costs to us.
“The report shows that clearly and what’s really worrying is the broader impact this will have. Right now, we’re seeing the effect on the retail-clothing sector, but what about all the other sectors that are impacted, stationery, furniture and other consumables for example, leather, and other textiles? This is just the beginning, and it’s a precursor of what’s to come,” said SA Clothing and Textile Workers’ Union director of research Simon Eppel.
“These offshore operations are causing real distress to competition, to the economy and to jobs. If we cannot succeed in mitigating the risk, then we should have banning these apps as an option. We’ve seen countries like India implement a localisation mandate. That’s something we should be looking at very seriously, how to localise these operations, how to bring compliance and how to make sure they contribute to the local economy.”
SA is not alone in grappling with the fallout. India, Brazil, Indonesia and Turkey have moved to rein in offshore platforms through tighter import controls, local sourcing mandates and digital regulations. In some cases, governments have even banned platforms that failed to comply.
While SA has taken some steps, including the scrapping of low-value parcel exemptions in 2024, which now subjects imports under R500 to standard VAT and customs duty, the report said more action was needed to level the playing field.
Among the proposed measures were stricter compliance requirements, improved consumer protection protocols and stronger digital infrastructure to support local e-commerce. The report also calls for a broader localisation push within the online retail ecosystem, one that links local suppliers with growing digital demand.
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