Competition Commission addresses competitive challenges from Temu and Shein in a bid to ensure fairness in the e-commerce sector
The Chinese e-commerce platforms have dominated the e-commerce market in recent months due to its cheaper offerings.
This photo taken on June 11, 2024 shows workers producing garments at a textile factory that supplies clothes to fast fashion e-commerce company Shein in Guangzhou in southern China's Guangdong province. Picture: Jade GAO / AFP
Stephen Grootes speaks to James Hodge, acting deputy commissioner and chief economist at the South African Competition Commission.
Listen to the interview in the audio player below.
The debate around the impact that Chinese e-commerce platforms like Temu and Shein are having on the local economy is a hot one.
Temu and Shein are websites where consumers can purchase almost any item, from clothing to toys, even furniture and electronic equipment.
These products are shipped from China, and sold to the South African consumer at a fraction of the price it would ordinarily pay for similar items if they were bought in the country.
But the Competition Commission is on a mission to ensure the likes of Temu and Shein play by the same rules as other e-commerce sites.
One such move is SARS implementing a 45% tariff on imported clothing, regardless of its value.
The revenue service had previously decided to only charge packages below the value of R500 at only 20% with 0% VAT.
Speaking to Stephen Grootes on The Money Show, James Hodge, acting deputy commissioner and chief economist at the Competition Commission says their inquiry revealed discrepancies between the rules that apply to how local and international e-commerce platforms operate.
"When we did our inquiry, a lot of our focus was in e-commerce was around the market place seller and their relationships with these big platforms and whether they were being treated fairly."
- James Hodge, acting deputy commissioner - Competition Commission
"What Temu and Shein have sort of highlighted, is where trade policy can also compliment competition policy. And I think the debate is also now shifting to where the industrial policy can play a role in promoting a digital industrialisation and a digital economy. "
- James Hodge, acting deputy commissioner - Competition Commission
"There has been a rethinking of how competition law, but also how other rules and regulations can come in more rapidly and make decisions more quickly. So it's a complete challenge at the moment."
- James Hodge, acting deputy commissioner - Competition Commission
Scroll to the top of the article to listen to the full interview.