For Immediate Release
Date: 26 June 2024
The Institute of Chartered Entrepreneurs Supports Takealot’s Call for E-commerce Sector Reforms to Protect Local Industry
The Institute of Chartered Entrepreneurs (IoCE) stands in firm support of the Takealot Group’s recent call for reforms within the South African e-commerce sector. This initiative aims to create a fair playing field that supports the country’s localisation efforts and safeguards the sustainability of our local manufacturing industries, particularly within the clothing and textile sectors.
The rise of international e-commerce giants such as Shein and Temu, which directly compete with local retailers like Superbalist.com and the Foschini Group, highlights a significant challenge for South Africa’s reindustrialisation and localisation efforts. These platforms leverage business models that flood the market with inexpensive products, exploiting outdated regulations and loopholes. This creates an imbalance that hinders the development and sustainability of local industries.
The Takealot Group has rightly pointed out the regulatory gaps that enable these platforms to offer products at exceptionally low prices while avoiding duties, taxes, and other government fees imposed on conventional retailers. The so-called de minimis rule, allowing packages under R500 to be imported with a 20% duty and no VAT, has been a notable loophole. However, the South African Revenue Service’s (SARS) decision to impose a 45% duty on clothing imports before VAT from 1 July is a step in the right direction.
It is imperative that policymakers craft comprehensive regulations to level the playing field, ensuring that all market participants adhere to the same standards and practices, including labour protection regimes within which SA manufactureresand online retailers operate within. This will contribute fairly to the national economy and protect domestic retailers from unfair competition. If these disparities remain unaddressed, local businesses will continue to be placed at a significant disadvantage, further exacerbating economic challenges.
While we sympathise with the economic hardships faced by all South Africans, it is crucial for consumers to understand the deleterious effects of unfair competition from Shein and Temu on the local manufacturing sector. The affordability of products from these platforms should not come at the cost of undermining local industries and the jobs they provide.
Tebogo Khaas, global chief entrepreneur of the IoCE, emphasises the importance of protecting the local clothing industry. He argues that the duties on low-value imports, although still very low, are essential for supporting vulnerable consumers employed within the manufacturing sector. Khaas spoke in anticipation of the upcoming launch of the e-Commerce Barometer, a mult-stakeholder initiative spearheaded by Public Interest SA.
This perspective aligns with our stance that prioritising local entrepreneurship including the welfare and jobs of those within the local sector is vital, even amid financial difficulties.
In conclusion, the Institute of Chartered Entrepreneurs calls upon all stakeholders, including consumers, policymakers, and businesses, to support measures that ensure fair competition in the e-commerce sector. By doing so, we can collectively contribute to the revitalisation and growth of South Africa’s local industries, fostering a more sustainable and equitable economic future.
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NB: Statement updated at 20:50 to emphasise the fact that the issue not only affects Superbalist.com but also other retailers such as The Foschini Group.
For media inquiries, please contact
Bagaetsho Oteng
Media & Communications
Institute of Chartered Entrepreneurs
010 005 5884
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About the Institute of Chartered Entrepreneurs
The Institute of Chartered Entrepreneurs is dedicated to supporting and promoting ethical entrepreneurship in South Africa. Our mission is to foster a conducive environment for sustainable business practices that contribute to the nation’s economic development and social welfare.
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