Fast Fashion, Slow Answers: Shein Opens at Mall of Africa as Tax Controversy Grows

Shein’s Mall of Africa Pop-Up Arrives Just as Tax Controversy Heats Up

Shein, the ultra-fast fashion powerhouse from China, is about to make its South African in-person debut, but it’s not walking into the country without raising some eyebrows.

Starting Saturday, 2 August 2025, Johannesburg’s Mall of Africa will host a Shein pop-up store through 11 August. But before local shoppers can get too excited, there’s a twist: you can try on the clothes, but you can’t walk out with them. That’s right, no tills, no bags, just touch, test, and tap online.

Instead, Shein is offering an “experience space” where shoppers can physically engage with the clothes and then place orders digitally on-site, complete with online-only discounts.

It’s a bold retail move, but some South African fashion retailers are calling it a distraction from a deeper issue: Shein’s tax behaviour.

What’s Really Behind the Pop-Up?

The timing of this store launch isn’t just about brand visibility, it lands during peak scrutiny of Shein’s operations around the globe, particularly its tax and import practices.

The company recently reported a whopping $400 million in profit in the first quarter of 2025, raking in nearly $10 billion in revenue. These figures, published by Bloomberg, raised questions—not just because of their size, but because they coincided with American consumers racing to buy before tariffs hit Chinese goods.

Shein denies the figures, calling them “inaccurate,” but declined to share corrected data.

Behind the profit headlines, Shein’s dream of going public in the United States has stalled, largely due to pressure over supply chain transparency and ethical labor concerns. The company is now eyeing Hong Kong for a stock listing, but still awaits a green light from Chinese regulators.

A Tax Loophole or Tactical Genius?

Here in South Africa, Shein’s digital-first model has come under fire for allegedly dodging local taxes. Industry insiders and retail associations claim Shein is using a “de minimis” import loophole, where shipments under R500 enter the country free of VAT and with reduced customs duties.

Critics say Shein splits larger orders into multiple small parcels to qualify under this rule, allowing them to drastically undercut local competitors who must pay full taxes and duties.

Michael Lawrence of the National Clothing Retail Federation put it plainly: “They are not paying duties and are avoiding VAT where it should be applied.”

SARS Commissioner Edward Kieswetter confirmed that the revenue authority is tightening the net on online retailers exploiting this gap, stating that over R3 billion in tax revenue has already been lost due to this practice.

“We are pursuing parity and fairness in the application of customs duties,” Kieswetter said, vowing to close the loophole.

Shein, for its part, claims its low prices come from a technology-driven, on-demand supply chain—not tax tricks.

Retailers Feeling the Heat

Beyond the boardroom debates, the impact is being felt on the ground. A recent Bureau for Economic Research report showed that business confidence among South African clothing retailers has nosedived from 68% to 38% in just one quarter.

Blame is being placed on poor sales and the rise of ultra-cheap online retailers like Shein and Temu.

Local brands, many of which employ South Africans and pay full tax, are feeling abandoned by a system that seems to favour low-cost imports over fair competition. Some are calling for a full ban on platforms using “exploitative” trade practices.

Public Hype vs Public Trust

Still, South Africans are curious. TikTok and Instagram are already buzzing with excitement over the chance to finally “see Shein in real life.” But the hype is matched by backlash.

On X (formerly Twitter), user @SiphoStylez posted,

“Can’t wait to visit Shein at Mall of Africa… but are we really supporting our local fashion industry by doing this? 🤔🇿🇦”

Others raised concerns about labor ethics and fast fashion’s environmental toll.

As the fashion giant steps into one of Africa’s biggest malls, the question isn’t just what South Africans will try on, but what Shein’s legacy in the country will look like. Is this a fashion revolution, or a tax loophole in disguise?

Shein’s Mall of Africa pop-up isn’t just a retail experiment, it’s a public relations test. Can a brand facing international tax investigations and criticism for dodging duties still win over South African hearts (and wallets) with a flashy experience and discounted prices?

The answer may shape how the country deals with foreign e-commerce giants going forward.

For now, all eyes are on Midrand.

{Source: Swisher Post}

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