Shein Feels the Heat: South Africa’s Import Tax Shakeup Sends Prices and Shoppers, Elsewhere

Chinese fast-fashion giant Shein loses traction as new duties level the e-commerce playing field in SA

If your latest Shein cart suddenly looks more expensive than usual, you’re not imagining things. A new wave of import tax changes in South Africa is hitting Chinese e-commerce platforms hard and Shein appears to be the hardest hit.

From price hikes and shifting shopper sentiment to retailer applause and Google search data, there’s growing evidence that recent tax changes are reshaping South Africa’s online retail battlefield.

What Changed and Why It Matters

At the centre of the shake-up is a tax loophole that allowed companies like Shein and Temu to pay just 20% duty on shipments valued below R500.

That flat-rate duty, introduced back in 2007 to speed up courier clearance processes, unintentionally gave international platforms a huge price advantage, particularly in fast fashion.

Meanwhile, local retailers like Mr Price and TFG were stuck with 45% import duties and 15% VAT on bulk clothing imports—a formula that made it nearly impossible to compete on price.

After pressure from the industry, including legal challenges from Grain SA, the Consumer Goods Council, and more—SARS finally acted.

From February 2025, SARS began charging 15% VAT on top of the existing 20% duty for all sub-R500 imports. This effectively ended the golden era of near-duty-free Shein orders.

“We’ve seen the outrage on social media over Shein’s price hikes. It’s proof the changes are working,” said Mr Price CEO Mark Blair.

Shein’s Popularity Dips as Prices Rise

For shoppers, the effects were subtle at first. But by September 2025, many began noticing that Shein’s previously unbeatable prices weren’t so unbeatable anymore.

The result? A 21% drop in Shein-related Google searches year-on-year, while Temu searches rose 31%—possibly because Temu’s broader product range wasn’t as heavily affected by the clothing-focused tax hike.

The dip in interest began just before the VAT change in August 2024 and has continued well into 2025, according to Slant Research and Google Trends.

Winners and Losers in SA’s E-commerce Wars

While Shein struggles, other players are holding steady or gaining ground:

• Takealot remains SA’s top online retailer with a modest 3% increase in search traffic.

• Amazon South Africa, despite the global brand clout, saw no significant change in interest.

• Temu, the Chinese competitor with a wider product mix, appears to be capitalising on Shein’s troubles.

Local retailers like TFG and Mr Price have welcomed the tax changes. TFG CEO Anthony Thunström said the slowdown in Shein’s local sales was already visible and described the move as essential to protecting local jobs and fairness in the industry.

More Than Just Fashion: A Bigger Trade Correction

While most shoppers may feel frustrated at the checkout, this is more than just a fashion story—it’s a national policy correction.

The 45% duty on clothing imports was originally introduced to protect South Africa’s textile industry against low-wage foreign competitors. For years, the sub-R500 loophole undermined that goal, favouring overseas platforms over homegrown brands and risking local job losses.

SARS, after much pushback and technical hurdles, finally implemented a tiered tariff system aligned with the World Customs Organisation (WCO) model in February 2025. It strikes a balance between easing courier congestion and ensuring tax fairness across the board.

Will Shein Bounce Back?

The long-term impact on Shein’s local market share remains to be seen. If the company adjusts its pricing, builds local warehousing, or partners with South African retailers, it could regain traction.

But for now, its once-dominant price edge is blunted—and shoppers are taking notice.

Your Shein hauls just got pricier, but local fashion might finally have a fighting chance.

{Source: My Broad Brand}

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