Takealot’s plan to fight Temu and Shein

Superbalist will limit in-house brands sold on its platform and focus on garnering more international labels to fight Chinese competitor Shein for increased market share, Sunday Times reports.

This follows the Takalot Group — comprising Takealot.com, Mr D, and Superbalist — reporting a trading loss of R252 million, which group CEO Frederik Zietsman attributed to Superbalist.

This poor performance by Superbalist is linked to the rapid rise of Chinese clothing retailer Shein, which has taken the South African Market by storm.

A recent report by the Marketing Research Foundation, which focused on the South African retail environment between 2021 and 2023, found that Shein dominated its competitors.

The report divided online clothing retail into three categories: women’s, men’s, and children’s.

Shein was the number one retailer in every category by at least double the market share of the runner-up.

Superbalist featured in the women’s and men’s categories but only made up 3% of the market in each. Shein’s market share comprised 35% in the women’s category and 8% in the men’s.

“Superbalist has seen a difficult year, to be honest, over the last financial year. They were in the eye of the storm when it came to the entry of Shein into the country,” said Zietsman.

“We need to reposition [Superbalist’s] offering and think about some value-add we can bring in.”

In-house labels, often used by retailers to expand their catalogues, will be limited to certain subcategories.

Superbalist will instead look to international retailers to expand its product range, such as its current partnership with H&M, which sees the Swedish fast-fashion brand use Superbalist as its South African marketplace.

In its 2024 financial results, the Takealot Group also called on regulators to create a more fair playing field in the South African e-commerce sector.

This relates to the increased competition from international retailers such as Amazon and Shein.

“The rise of e-commerce platforms such as Shein and Temu in South Africa underscores a growing concern that threatennation’stion’s reindustrialisation and localisation efforts,” Takealot said.

It argued that business models that flood the market with inexpensive products create an imbalance that hinders the sustainability and development of local industries.

“These e-commerce platforms exploit outdated regulations and loopholes by using shipping methods that allow them to offer products at exceptionally low prices while avoiding duties, taxes and other government fees imposed on conventional retailers,” it argued.

This refers to the so-called de minimis rule that allows all packages under R500 to be imported with a 20% duty and no VAT.

However, the South African Revenue Service said such small parcels would be taxed at the appropriate rate from tomorrow, 1 July — 45% on all clothing plus VAT.

Takealot said regulatory gaps in the e-commerce sector made the market unconducive to fair competition, which “leaves domestic retailers, both online and offline, at a disadvantage.”

“It is imperative that policymakers craft regulations to level the playing field, ensuring all participants adhere to the same standards and practices and contribute fairly to the national economy,” it continued.

“If unaddressed, the disparities will continue to widen, placing local businesses at a further disadvantage.”

However, South Africans do not see eye to eye with Takealot as they claim Shein is the only clothing retailer in the country offering affordable clothing.

Consumers argue that local retailers, although marketed as affordable, are priced out of reach of most South Africans.

National Clothing Retail Federation executive director Michael Lawrence disputed the claim that people who can make online credit card purchases on these sites are vulnerable consumers.

He argued that his organisation represents “far more vulnerable consumers” in the retail world, many of whom are employed within the manufacturing sector and positively affected by the taxes.

“What is true, of course, is that the household purse for all population segments has been under substantive stress for the last decade.”

Lawrence acknowledged that this is an uncomfortable period for consumers but that they must look at the bigger picture.

Subscribe to our daily newsletter

Latest news

Partner Content