The fast and the fashionable: How Shein is reshaping retail

In July last year, something in the air changed for the Dodo group, one of South Africa’s largest independent footwear retailers, which operates shoebox.co.za and the chains Dodo’s and Franco Ceccato.

As Kelli Kupritz, Dodo’s marketing director, tells it, there was a big drop in online purchases in the middle of last year — something she traces to the moment when the Chinese brands Shein and Temu stopped being a distant threat and began reshaping the face of local retail in a far more direct way.

Shein and Temu “can always outspend any new player”, she says, which meant that not only did sales drop for local rivals, but advertising costs for online fashion brands started to “become far more expensive”.

It became hard to avoid Shein’s marketing. If it wasn’t Katy Perry promoting her new clothing line on Shein, it was rapper Cardi B hawking its new cut-price coat collection.

As far as South Africa goes, Dodo was right in the firing line: its physical stores served a lower-income market, for whom Shein’s bargain clothing was an instant drawcard in an environment where jobs and disposable income were at a premium. “Shoes used to be a necessity; now they seem like a luxury,” says Kupritz.

A number of factors made Shein’s arrival in South Africa all the more damaging.

First, social grants — the main income for many of Dodo’s customers — are increasingly being paid later in the month. Second, online gambling, which Kupritz describes as “the worst thing that has ever hit this country’s economy”, has eaten up households’ disposable income. And third, the enforced exodus of foreigners from South Africa, who were customers as well as workers in the sector, had hit hard.

Dodo had to do some serious introspection. Today, Kupritz says, it can only compete on something the fast-fashion giants can’t offer: in-store and after-sales service.

“Once you’ve ordered from Temu or Shein, that’s it — it ships, you pay your duties, and, though you can return the goods, the process is far more tedious,” she says. “We’ve had to look very deeply at how we make it a better shopping experience, because we can never win on price against Shein and Temu.”

This is just one of many first-hand accounts the FM has heard from clothing retailers over the past month — from chains like Dodo to the smaller boutiques — which all have one common refrain: the ruinous impact of Shein on South Africa’s retail sector.

New statistics show that one in five South African online shoppers now use Shein, making it the country’s second most-used online retail platform, behind Takealot (35.3%), but ahead of Checkers’ Sixty60 (15%) and Amazon (12.7%).

This is one of the more arresting numbers that leaps out from the World Wide Worx’s Online Retail in South Africa 2026 report, based on interviews conducted last year with 23,910 people.

Shein arrived in a receptive market. Last year, online shopping scaled new peaks in South Africa, growing 22.5% from the year before. And this year, shoppers are expected to spend R159bn on online platforms — more than five times the R30.2bn spent in 2020.

“South African online retail has grown from less than 1% of retail turnover to a 10th of the market in a decade,” says Arthur Goldstuck, MD of World Wide Worx, attesting to what is at stake for companies battling the Chinese entrants.

While Goldstuck’s study shows how increasingly comfortable South Africans are with buying from these overseas firms, this familiarity is also reflected in sales.

Five years ago, Shein and Temu barely registered as competitive threats to South African clothing retailers. Today, those online fast-fashion platforms account for about 3.6% of all local clothing, footwear and leather sales, matching in only a few years the market share that international players such as Zara and H&M took a decade to build.

And when it comes to online clothing and footwear sales, Shein is already thought to be hoovering up about R28 of every R100 spent. What is more remarkable is that it has done it so easily, despite sizeable import barriers.

About 18 months ago, the South African government imposed a 45% import duty as well as extra taxes on parcels specifically to counter the threat from China.

But Kupritz says this hasn’t made much difference, as shoppers have become quite savvy at working the system to keep their orders below the parcel limit. In other words, Shein and Temu are still gobbling up market share — and the retailers are worried.

It’s not just the clothing retailers. Temu, which only arrived in 2024, has pushed into furniture, homeware and other bulky goods, putting retailers well beyond fashion on notice.

Global dominance

It is cold comfort that South Africa, a relatively small, vulnerable economy on the tip of Africa, is not alone in feeling the heat from Shein and Temu, companies that have grown from zero to billions in less than two decades.

US secretary of state Marco Rubio has been one of the more prominent critics, railing against its “slave labour, sweat shops and trade tricks” in a letter to the UK’s chancellor in 2024, arguing that Shein’s listing in London should be blocked.

Customers didn’t care.

As it is, Nedbank analyst Paul Steegers estimates Shein and Temu’s combined share of the global “value” apparel market, those at the lower price points, at about 40%, and about 37% of online clothing and footwear sales.

And while Rubio’s campaign did lead to Shein scrapping its idea of listing in London, a month ago it listed on the Hong Kong Stock Exchange at a price which valued it at $26.3bn.

In anyone’s book, this is a remarkable ascent to the top of the heap for a company that began life only in 2008, selling wedding dresses to wealthy foreigners.

It was founded by Sky Xu, born in 1984 to two factory workers. He studied international trade and, after various attempts at selling consumer products, launched a business called SheInside in 2008, selling wedding gowns made in the markets of Guangzhou to the West. He soon realised that there was a much wider market ready to be tapped.

Now in his early 40s, Xu is someone who “often wears pyjama-like cotton shirts and pants at work”, has intimate knowledge of every Shein factory, and “can cite the average wage of garment workers”, according to The Wall Street Journal.

He is also the biggest beneficiary of Shein’s listing. He holds about 30.1% of Shein so his paper wealth now stands north of $8bn. It would have been far higher had Shein been able to list at about $98bn, which it was valued at in 2022.

Still, what Shein’s listing has done is lift the lid on the world’s largest fashion company which, until now, largely operated in the shadows. And the numbers are immense: revenue for last year was $41.8bn, and net profit $2.06bn (though this was 38% down from 2024).

Its profit margins also tell an interesting story. For every R100 of sales, Shein makes R67 of gross profit but then spends a lot on delivery, marketing and technology, to be left with about R4.10 in operating profit.

This is a relatively thin margin compared to South African retailers. Truworths makes R19.20 in operating profit for every R100 of sales, Mr Price makes R14.20 and even the struggling TFG makes R6.30 — all of which trump Shein.

Put another way, Shein is spending a lot on growing fast, and gobbling market share. And this is sowing chaos and panic among retailers across the world.

In its most recent annual report, South Africa’s largest fashion retailer, TFG, flagged this risk, saying: “Shein’s ultra-fast model, enabled by AI-driven demand sending, is resetting expectations on speed, relevance and value.”

TFG said that without the hassle of physical stores, Shein can offer bargain-basement prices and outspend on marketing. “If customers find a cheaper online option from Shein, Temu or Amazon at acceptable quality, they may not return,” it warned.

This is clearly no academic threat.

“I buy from [Shein] regularly. Tax is now included in the price you see, so there are no surprises,” said one South African shopper on a local chat forum. “I have been very happy and the return/refund process is also good.”

Yet another described the quality as “variable”, warning that you “have to check the reviews and all the details carefully [but] delivery is reliable and returns are easy”.

Besides the patchy record on quality, there are ethical concerns about Shein.

In a BBC documentary in 2022, journalists smuggled hidden cameras and undercover operatives into a supplier’s factory in Guangzhou to reveal how staff worked 18 hours a day and got only one day off a month, in violation of even Chinese labour laws.

“If there are 31 days in a month, I will work 31 days,” one worker said.

Shein, in response, told the BBC it was “committed to ensuring the fair and dignified treatment of all workers within our supply chain”, and would be investing in strengthening governance.

All suppliers had to “adhere to our code of conduct”, Shein said.

Which illustrates the sharp dissonance: Shein may be great for consumers, but it’s less great for its workers, and a bit of nightmare for fast-fashion rivals thousands of kilometres away.

Get out, get out now

Walk down Kloof Street in Cape Town, which previously hosted a slew of clothing boutiques dotted among the coffee shops, and the fashion pickings today are slim.

For nearly two years, Erin Steyn ran Purr, one such boutique. It stocked South African designers — jerseys priced from R800 to R5,000 amid jewellery and homegrown labels — alongside some overseas brands.

Last year Steyn travelled to Vietnam, where she saw the apparel business at its source, and realised what South Africans are truly up against.

“I remember seeing what used to be a mall, obviously run down, but people had completely taken it over, stall after stall, and they’d built their own infrastructure inside the skeleton of the building,” she says.

“There was so much clothing coming out of them that vendors were sitting on boxes to eat lunch, because it was being manufactured at such a ridiculous rate. I came back and thought: how am I going to compete in this environment?”

It crystalised her thoughts and, a month later, when someone approached her about buying Purr, she leapt at the opportunity to get out.

Which isn’t to say the local industry is entirely dead. Summer, for instance, provides a respite as the volume of tourists trekking through Cape Town, often making impulsive purchases, provides a cushion. But winter is a different story.

A locally made cardigan might cost R1,200 as “women in communities sew and knit it by hand”, but Shein will sell you something that looks similar for less than R400.

“The competition was suddenly right on your doorstep [and] you’re not working at the same production rate as Shein and Temu. I think that was a big part of it,” Steyn says. Purr sourced its clothing almost entirely from local designers, wholesale to retail, with one exception: footwear, through a Cape Town import agency. Steyn watched orders for these products shrink steadily through her final year, a small data point inside a much larger trend.

What struck Steyn most about Shein is the turnaround time — about two weeks from order to delivery. This is a speed that no boutique supply chain, built on individual designers and hand-finished stock, could match.

“We’re not America, or the UK, or Europe, with that currency strength behind us,” she says.

To be able to do this, Shein is also famously strict with its suppliers. As technology news outfit Rest of World reported of its ruthless efficiency in 2022, samples for orders have to be sent to Shein’s buyers and updated within three days.

“The company is punitively strict with deadlines — more than five days and suppliers face the possibility of being cut,” it said.

But if Shein has speed and cost nailed, it has another arrow in its quiver too. While a retailer like Mr Price carries about 7,000–8,000 products at any one time, Shein’s website can offer hundreds of thousands.

For a rival, this is hugely intimidating.

Luckily for Steyn, she was a commerce graduate who was able to switch to a career in financial management and bookkeeping. Many others won’t have that luxury. The department of trade, industry & competition says there were 212,000 people working in the clothing and textiles industry in South Africa in 2019.

Steyn’s decision seems prescient in hindsight. Since she sold her stake, Purr is now having a closing down sale for the physical shop, and will move online entirely.

Price competition

So how cheap is Shein really, compared to local retailers?

Steegers’ team runs a six-monthly pricing survey comparing a basket of items across local retailers and Shein. It isn’t an apples-to-apples quality comparison — jeans from Truworths are often far better made than those from Shein or Pepkor — but the comparison is nonetheless deeply revealing.

Typically, Shein’s clothes sell for 20%–30% cheaper than Pepkor, 40%–50% cheaper than Mr Price, and up to 70% cheaper than Truworths, according to Steegers’ analysis. Temu wasn’t included, so no like-for-like figure exists there yet.

This presents a real risk to South Africa’s retailers. Those whose proposition sits between “fashion” and “value”, which compete on trend and price, occupy the ground that Shein and Temu are attacking first.

Steegers says Mr Price specifically seems vulnerable, since its “value fashion shopper”, typically someone aged from 13–40, is similar to Shein’s core customer. Pepkor seems to be the most insulated, since its products are weighted to school uniforms, kidswear, basics and financial services rather than fast fashion.

As it is, Pep’s basic clothing already prices competitively with Shein and its peers, and benefits even more by the fact that it is more convenient than the online platforms, which take from nine to 12 days to deliver.

It’s no surprise that Truworths carries the widest price gap, but it’s less directly comparable. TFG, meanwhile, has the broadest retail portfolio and strongest capability across various channels, according to Steegers.

But while Shein is cheaper, it seems most South African retailers have now dropped their prices to similar levels, to narrow the gap.

Irina Schulenburg, a retail analyst at Old Mutual, says a basic white T-shirt from Mr Price is now priced similarly to, or sometimes even cheaper than, an equivalent item from Shein, once duty, customs and delivery are factored in.

And, to ensure they’re at least in the game, all the local retailers are building their own online sales platforms — with varying degrees of success.

TFG’s platform Bash saw online sales soar 49% this year, to the extent that they now make up 8.2% of all the group’s sales. This is far higher than Mr Price, where online sales last year grew a paltry 4.9%, making up just 2.1% of all sales.

Yet Bash right now is only half as profitable as the stores — which is counterintuitive, since it has far fewer overhead costs such as rent.

Schulenburg says: “It’s a fine balance between building a competitive online offering and protecting the profitability of your in-store operations.”

Bash, for instance, runs on thinner operating margins than in-store trading, once warehousing, logistics and delivery costs are fully loaded.

In other words, building large online operations to counter Shein may, initially, only hurt profitability even more. As it is, Schulenburg says the gross profit margins of South African retailers have dropped by about 200 basis points over the past 10 years.

Schulenburg isn’t sure if South African retailers could win a pure price war.

In any event, she says it’s an unfair comparison, given the different products and different quality. Yet one thing seems clear: the years of fat profit margins are probably over.

The winners, she says, will be those with the sharpest grip on inventory and customer data, who can get the right product, in the right size, to the right place.

Steegers agrees that South African retailers will find it “impossible” to match Shein on price alone.

The more likely response is that they’ll slash prices on a handful of high-volume and highly visible products to boost the perception of their value proposition while leaning heavily on their advantage when it comes to physical convenience.

Same same but different

South African retailers contacted for this article insist they’re not trying to replicate Shein or Temu, but are rather defending the advantages they have: local brands, store networks, credit books and direct customer relationships.

Emanuel Cristaudo, joint CEO of Truworths, tells the FM that his company’s strength is its product and brands, built over 109 years, and evident in its 770 stores.

“[This] means we have a deep understanding of what the South African fashion customer wants,” he says. “That combination of trusted brands, quality, local fashion insight and physical presence, in a market where customers still value the mall experience, is not something a pure-play cross-border retailer replicates.”

Truworths has 2.9-million active account holders shopping with it on credit, and another 15.4-million people on its loyalty programme. This, Cristaudo says, provides a direct relationship with millions of South Africans.

But he also says that Shein and the other online platforms have had a serious advantage for some time, which has created a distorted market.

“We pay full import duties and VAT on all imported product and fabric, and we manufacture approximately 45% of our apparel locally through cut-make-trim partners,” he says. “For years, low-value cross-border parcels were cleared at a concessionary rate well below what local retailers carry, which was uneven.”

This has now been changed, which Cristaudo describes as a “constructive step”, as are other measures to ensure local and global retailers compete on the same terms.

He also warns against the idea that retailers can simply move entirely online. Customers increasingly move between channels, he says, and because of this, Truworths’ store network remains a major advantage.

Others agree.

Ricardo Valente Da Conceicao, the general manager of H&M South Africa, says the chain sees its physical and digital channels as complementary, “helping us to engage with customers wherever and however they choose to shop”.

Anchor Capital’s Steph Erasmus says local retailers have two other advantages: first, they can offer store credit, which is something Shein and Temu are unlikely to do, and second, they can put a product in a customer’s hands almost immediately.

Shoppers will tolerate an online platform’s longer delivery window — but only if the price gap is large enough. And a physical store that lets a customer try five items, and leave with the one that fits, is worth something, even if this is costly to maintain.

Erasmus says the equation might tip towards the foreign entrants if Shein and Temu build local or regional warehouses, as reports suggest is imminent.

Some local retailers are lobbying for greater “intervention” to protect local jobs and retailers. But the question is whether anything can be done to protect local retailers, or whether Shein’s success is a structural shift for which the only defence is adaptation.

Some countries haven’t raised the white flag just yet.

Last August, US President Donald Trump revoked an exemption on letting parcels worth less than $800 into the US duty free, largely to mitigate the threat of Shein and Temu. Then the EU imposed a €3 fee on low-value e-commerce imports to curb “unfair competition” from China.

This clearly hurt, as it revealed this week that its revenue inched up just 1% in the six months to July, with operating profit falling 53% and its profit margin shrinking to just 2.1%.

Investors hated it, sending the stock down 14% in Hong Kong on Monday.

Yet it seems Shein has responded to the US and European measures by diverting stock away from those markets and cutting prices in the rest of the world, including South Africa. These Chinese firms, it seems, are looking to play the long game, to build a dominant position in global clothing retail.

Steegers, for one, doesn’t believe the new import duties will derail the trajectory of these Chinese firms in South Africa. If anything, Shein seems to be absorbing the tax hit into its own margins, to ensure customers remain largely unaffected.

“They’ll regroup, and probably just put it into their own pricing,” he says.

In other words, the smart money isn’t betting on Shein or Temu crumbling.

Instead, local retailers will have to double down on what they can do better: running stores, providing credit, and bolstering the service they offer those who walk through the door.