{"id":822794,"date":"2025-05-05T12:30:00","date_gmt":"2025-05-05T10:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=822794"},"modified":"2025-05-05T12:12:28","modified_gmt":"2025-05-05T10:12:28","slug":"shein-under-siege-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/822794\/shein-under-siege-in-south-africa\/","title":{"rendered":"Shein under siege in South Africa"},"content":{"rendered":"\n

Shein is under siege in South Africa. It is losing market share, and the South African Revenue Service (SARS) is set to withdraw all its concessions.<\/p>\n\n\n\n

In March, SARS Commissioner Edward Kieswetter issued a notice that he intends to withdraw all forms of concessions currently in use which are ultra vires.<\/p>\n\n\n\n

Kieswetter said many concessions are no longer applicable due to changes in law, policy, procedure or technological advancements.<\/p>\n\n\n\n

He highlighted that some concessions date back 20 years and were granted for a specific purpose at the time, which are no longer applicable.<\/p>\n\n\n\n

So, to ensure compliance with the Act, SARS intends to withdraw all these concessions that traders rely on.<\/p>\n\n\n\n

This would mean that products from Chinese retailers Shein and Temu can no longer be cleared at customs using a simplified process with a 20% flat duty rate.<\/p>\n\n\n\n

This specific concession was implemented in 2007 and was one of the primary mechanisms the e-commerce giants used to import their goods into South Africa.<\/p>\n\n\n\n

The mechanism, which only applies to shipments valued under R500, was intended to help logistics companies cope with an influx of imports.<\/p>\n\n\n\n

These imports flooded the system as international e-commerce activity accelerated and more South Africans bought products from overseas.<\/p>\n\n\n\n

South African retailers said these concessions gave international players like Shein an unfair advantage as they pay far less import taxes than local players.<\/p>\n\n\n\n

Retailers further claimed that the concessions were open to abuse, with importers using loopholes to ensure they paid only 20% import taxes on clothes instead of the usual 45%.<\/p>\n\n\n\n

For example, they would split up large orders to ensure each package is under R500 and then combine these packages again after it passed through customs.<\/p>\n\n\n\n

In 2024, SARS introduced a temporary measure to clamp down on these practices by adding 15% value-added tax (VAT) to the 20% flat rate customs duty.<\/p>\n\n\n\n

However, after review, all special concessions are now on the chopping block. Importers must ensure they comply with the current Act without relying on outdated concessions.<\/p>\n\n\n\n

\u201cThe withdrawal of concessions could lead to increased costs for businesses that previously benefited from special allowances or arrangements,\u201d PwC said.<\/p>\n\n\n\n

The process is open to feedback, with SARS giving stakeholders until 23 April 2025 to comment.<\/p>\n\n\n\n

Stakeholders who believe a concession should stay must indicate why the concessions should not be withdrawn or suggest legislative amendments.<\/p>\n\n\n\n

Shein losing market share in South Africa<\/h2>\n\n\n\n

The clampdown by the South African Revenue Service has already impacted Shein\u2019s performance in the country.<\/p>\n\n\n\n

New research by Slant Research revealed that Shein\u2019s market share has declined significantly since 2024 due to the revised import duty regime.<\/p>\n\n\n\n

\u201cAccording to our data, import duty and VAT payments on Shein orders are facilitated by third parties like Buffalo International and Meili Logistics,\u201d it said.<\/p>\n\n\n\n

The charts below show a significant increase in the median value of payments to these companies from September 2024.<\/p>\n\n\n\n

This data suggests that the government regulations have had a meaningful impact on Shein\u2019s sales.<\/p>\n\n\n\n

However, despite the increase in payment value, Slant Research also noted that enforcement appears to have declined.<\/p>\n\n\n\n

\u201cOur data shows fewer payments to logistics providers as a proportion of total purchases,\u201d Slant Research said.<\/p>\n\n\n\n

The charts below show Shein\u2019s median transaction amount and how its market share has changed over the past three years.<\/p>\n\n\n\n

\u201cIt\u2019s clear that Shein did not achieve the same level of market share at the end of 2024 as it did at the end of 2023,\u201d Slant Research said.<\/p>\n\n\n\n

\u201cSimilarly, progress in the first 10 weeks of 2025 lags far behind where the brand was tracking at the same stage in 2024.\u201d<\/p>\n\n\n\n

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Shein is under siege in South Africa. It is losing market share, and the South African Revenue Service (SARS) is set to withdraw all its concessions.<\/p>\n","protected":false},"author":10,"featured_media":822802,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[19467,3246,20059],"class_list":["post-822794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-edward-kieswetter","tag-sars","tag-shein"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=822794"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822794\/revisions"}],"predecessor-version":[{"id":822960,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822794\/revisions\/822960"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/822802"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=822794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=822794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=822794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}