Report reveals disturbing phenomenon with popular online shopping platforms such as Shein and Temu: ‘Really worrying’

Fast fashion, and particularly online retailers such as Shein and Temu, trades low price points and convenience for a drop in quality, value, and environmental responsibility. It ends up costing consumers more in the long run, as buyers have to replace clothing more frequently and are pushed to keep up with microtrends. But that isn’t the only financial impact; fast fashion websites can also hurt economies, as illustrated by a recent report from South Africa.

What’s happening?

The Citizen reported on the August assessment by the Localisation Support Fund. According to its analysis, Shein and Temu achieved 7.3 billion rand ($414.4 million) in sales from 2020 to 2024 — but cost South African businesses R960 million ($54.5 million). That translated to 2,818 fewer manufacturing jobs and 5,282 fewer retail jobs.

The report also noted that sales fell from R117 billion ($6.6 billion) in 2011 to R105 billion ($6 billion) in 2024. The two possibilities are that people are buying less clothing or cheaper clothing. Given how online sales have ballooned — and are expected to keep growing — the latter is the most likely explanation.

Why is the takeover by online retailers important?

In theory, a new business with a more popular product is simply how market competition works. But fast fashion is harmful to consumers and the planet. It encourages wasting money while producing tons upon tons of textiles, which end up as waste in landfills and the environment.

“The surge in the market of cheap goods from these e-commerce offshore platforms is depressing the prices that local retailers can charge,” Simon Eppel, director of research for the country’s Clothing and Textile Workers’ Union, said. “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 is really worrying is the broader impact this will have. 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.”

What’s being done about Shein and Temu?

Last year, South Africa removed a discount on shipping low-value packages that online retailers were exploiting to do business at the government’s expense. This research is the next step in identifying ways to protect the country’s economy from foreign retailers.

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