The Chinese e-commerce platform Temu is facing criticism from South African retailers who accuse it of exploiting tax loopholes. They want the government to change the tax rules on small items to protect local businesses from unfair competition.
Another Chinese online platform, Shein, has also been questioned for its tax practices, according to News24.
Etienne Vlok, from the Southern African Clothing and Textile Workers Union, said the government should act urgently to level the playing field for South African retailers.
Temu denied that it was using the de minimis rule, which allows low-value goods to enter South Africa without paying customs duties. The company said its success was based on its supply chain and operational efficiency, not on tax evasion.
“We are open to and supportive of any policy adjustments made by legislators that align with consumer interests,” said Kieran Powell, a Temu spokesperson, to Bloomberg News.
“We believe that as long as these policies are fair, they won’t influence the outcomes of competitive business dynamics.”
Temu launched its South African site in January 2024 and quickly gained popularity by offering cheap products and free delivery. It is part of PDD Holdings, which also owns Pinduoduo, a leading e-commerce platform in China.
Pinduoduo expanded globally and became the most downloaded app in the US in 2023. It entered the South African market with Temu, which sells products ranging from R10 to R1,000.
Temu’s delivery partner in South Africa is Fastway, which takes 6 to 20 days to deliver orders. This is longer than other regions, but it does not seem to affect Temu’s growth.
Temu’s mobile app is among the top three free apps on both the Apple App Store and Google Play Store. Shein, another Chinese e-commerce platform, is also in the top ten e-commerce companies in South Africa.
The e-commerce market in South Africa is expected to grow significantly in the next years, with Temu’s recent launch and Amazon’s planned entrance.
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