How Can African Retailers Compete with Shein and Temu?

Shein and Temu have become household names in Africa, synonymous with low prices, vast product ranges, and aggressive social media marketing. Their influence extends far beyond fashion, however, threatening the livelihoods of local retailers, manufacturers, and workers across the continent.

A study commissioned by the Localization Support Fund estimates that 7.3 billion rand (approximately $405 million) was generated by Shein and Temu in South Africa alone in 2024, representing 3.6% of the total market for clothing, textiles, footwear, and leather. This growth has come at a cost of 2,818 manufacturing jobs and 5,282 retail jobs, totaling around 8,100 lost positions.

Nigeria, Ghana, Kenya, and other countries are also grappling with the consequences of cheap imports flooding their markets. The Association of Ghana Industries’ chairman, Tsonam Cleanse Akpeloo, notes that these platforms have disrupted traditional business models by offering prices that are “attractive in price-sensitive economies.”

The sudden influx of cheap imports from Asia has exposed deep-seated issues within African economies. For decades, governments have struggled to create favorable business environments that allow local industries to thrive. The South African government’s attempt to tighten regulations governing small online imports highlights the need for stronger action against smuggling and better enforcement of customs and quality standards.

Some argue that Shein and Temu bring benefits such as job creation and increased competition. However, these claims are largely anecdotal and fail to account for the broader economic implications. As local retailers struggle to keep up with the pace of online giants, they’re forced to either adopt unsustainable business practices or risk being pushed out of the market altogether.

The tax dispute between South Africa and Shein/Temu raises questions about the role of governments in regulating online commerce. Have African nations been too permissive in allowing foreign companies to operate on their soil without adequate oversight? The answer lies in a complex mix of economic pragmatism, political expediency, and cultural exchange.

The issue is not simply a matter of Shein and Temu; it’s about the future of Africa’s industries, jobs, and economies. As governments continue to grapple with the consequences of cheap imports, they must also address the root causes of this phenomenon: inadequate policies, weak enforcement, and an over-reliance on cheap foreign labor.

Ultimately, creating a level playing field for local businesses will require African governments to take decisive action. This may involve implementing stricter regulations, investing in domestic industries, or providing support for small and medium-sized enterprises. By doing so, they can help mitigate the damage caused by Shein and Temu and ensure that local economies are not forever beholden to cheap imports from Asia.