Online shopping warning for South Africa
The Consumer Goods and Services Ombud (CGSO) has warned South Africans about the pitfalls of online shopping and the risks of cheap imports, adding that the legislation in South Africa needs an update to protect consumers in this new environment.
Liaquat Soobrathi, the Ombudsman, noted that for the fourth consecutive year, online transactions accounted for the greatest number of consumer complaints lodged with this office.
“This is despite e-commerce only making up about 5% of total retail sales in South Africa,” he said.
Many complaints about online shopping involve delayed or non-delivery of items, defective goods, or products not meeting customer expectations.
Among the concerns about the non-delivery of items and poor quality goods is p[artley due to the rise in fake websites and third-party sellers who don’t adhere to legislation.
It has been reported that South Africa is seeing a sharp rise in fake websites, which cybercriminals are using to steal sensitive information and money from unsuspecting consumers.
These fraudulent sites often mimic well-known brands and legitimate businesses, making them difficult to spot at first glance.
Once a victim enters their personal or financial details, the scammers gain access to accounts.
Soobrathi stressed that consumer protection is a two-way street: the law provides the framework (including the provision of an ombudsman to mediate between suppliers and consumers), but consumers must arm themselves with information to make responsible, informed choices.
He also shared his concerns about the increase in third-party sellers and the lack of accountability.
When products fail to meet expectations, customers may struggle to determine who is accountable—the seller or the platform.
This ambiguity can lead to challenges in securing refunds or replacements.
This is especially so with clothing, household accessories, and electronic devices.
“Social media is flooded with images of alluring products at improbably low prices. This should raise several red flags for consumers.
“More often than not, the quality of these products is substandard and not designed for longevity.
“Additionally, charges for delivery, tax and import duties are not disclosed at the time of purchase, and consumers are often hit with additional fees once the products arrive in the country,” he said.
This is often problematic as the consumer bears the onus of footing the bill for this return, even assuming that return addresses are provided.
“We have had many reports of some sites where the return address details are often unclear or incomplete.
“Ultimately, though, the biggest losers are the environment and local jobs. This is a massive price to pay for a cheap import,” Soobrathi warned.
He added while local suppliers generally meet these responsibilities, problems often occur with international vendors, especially due to language barriers and time zone differences.
The Consumer Goods and Services Ombud (CGSO) has no jurisdiction outside South Africa, making it challenging to address these issues.
This issue is partially relevant to the booming success of Temu and Shein.
According to the South African Express Parcel Association’s (SAEPA) CEO, Garry Marshall, they currently receive about 100,000 packages a day, of which around 40% are from Temu and Shein.
Temu and Shein dominate online shopping by offering ultra-low prices, trendy fashion, and a vast product selection.
Their success is driven by aggressive pricing strategies, direct-to-consumer models, and strong social media marketing.
These factors appeal to price-conscious consumers, particularly younger shoppers seeking affordable and stylish options.
However, Soobrathi highlighted that this is part of the problem.
“The consumers most at risk of being targeted by cheap online products are very often those who can least afford to shrug off a disappointing purchase,” he said.
Soobrathi stressed that the current legislation—like the Electronic Communications and Transactions Act (ECTA) and the Consumer Protection Act (CPA)—must be revised, given the advancements in shopping habits, to give more protection to consumers.
“The fact remains that there are clear gaps in the legislation when it comes to protecting online consumers, especially concerning online marketplaces that host high-volume third-party sellers who could be based anywhere in the world.
“Most consumers are unaware that they have contracted with a third-party seller until things go wrong,” he said.
“If the third-party seller subsequently ghosts the customer, very little redress is available.
“This is not a problem unique to South Africa, and many countries are in the process of amending legislation to provide greater transparency when it comes to the veracity of third-party vendors,” he added.
Soobrathi noted that while the ECTA and the CPA provide extensive protection to consumers regarding disclosure and information accuracy, they were published in 2002 and 2008, respectively, and much has changed in the interim.
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