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Superbalist’s Desperate Bid to Survive: Reinventing Itself in a Cutthroat Market


The Chinese Invasion: How Temu and Shein are Sucking the Life out of South Africa’s Online Retailers

Naspers-owned Takealot Group, the parent company of Superbalist, is feeling the heat as online retailers in South Africa struggle to maintain their market share in the face of cutthroat competition from Chinese e-commerce giants like Temu and Shein. In an effort to stay afloat, Superbalist has been forced to increase its Google online advertising by a whopping 200% since these foreign players entered the SA market.

The Rise of Temu and Shein

Temu, founded in 2014, has been making waves globally with over 350 million app users and sales of over $30 billion in 2023 alone. Shein, another Chinese giant, has grown into a global phenomenon with sales estimated to exceed $30 billion last year. These e-commerce disruptors are offering products at unreasonably cheap prices, leaving local online retailers like Superbalist struggling to compete.

The Impact on Local Businesses

The rise of Temu and Shein has led to a decline in sales for local online retailers, with some businesses reporting a 30% drop in sales since the beginning of the year. In its annual report, Takealot Group expressed concerns about the long-term repercussions of these foreign players on the country’s economic growth and the regulatory gaps that enable their exploitation of tax loopholes.

Takealot’s Plan to Fight Back

To counter the competition, Takealot Group is investing in improving infrastructure and scaling up its online platforms. The company is also looking to increase its online advertising and add new capabilities to stay ahead of the game. According to Frederik Zietsman, Takealot Group CEO, "In light of competition, we need to be clever about where we build equity and where we are just spending money. There has been a lot of information-sharing between the heads of Takealot Group units discussing how the company will deal with the fundamentals of scaling an online platform."

The SA Government’s Response

In an effort to promote a balanced and competitive online marketplace in South Africa, the South African Revenue Service has announced that it will start taxing clothing items manufactured internationally and bought from international e-tailers, in small quantities (under R500) at the same rate as large quantities (R500 and above). An import duty of 45% plus VAT will apply to such purchases. This move is seen as a positive step towards leveling the playing field and creating a more sustainable online retail market in South Africa.

The Future of E-commerce in SA

As Temu and Shein continue to make waves in the global e-commerce space, it remains to be seen whether local online retailers like Superbalist will be able to adapt and stay competitive. With the SA government stepping in to promote a more balanced marketplace, it’s clear that the days of cheap, imported goods dominating the online retail landscape are numbered. What’s next for e-commerce in SA? Only time will tell.



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