Shein feels pressure due to increase in import tax

A report shows that the Chinese online fashion and lifestyle retailer Shein has lost customers from South Africa due to the implementation of the import tax.

After years of exporting to SA, the taxman learned that customers do not pay the requisite customs duties.

As of 1 September 2024, the South African Revenue Services (Sars) introduced VAT in addition to the current 20% flat rate customs.

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Report on Shein

The report was released by Slant Research, a Cape Town-based company that uses data from non-traditional sources.

For this specific report, they collected data from third parties like Buffalo International and Meili Logistics. The two companies are among the few responsible for delivering orders from the retailer to customers.

According to Slant’s report, the third parties also facilitate import duty and VAT payments on Shein orders.

Shein’s performance

Slant said Shein’s market share has changed over the past three years.

“It is clear that Shein did not achieve the same level of market share at the end of 2024 (November, Black Friday) as it did at the end of 2023.

“Similarly, progress in the first 10 weeks of 2025 lags far behind where the brand was tracking at the same stage in 2024.”

Slant reported a notable drop in Shein’s market share following the implementation of the new tariff policy in 2024. This indicates that the government’s regulations have significantly affected the company’s sales.

De minimis rule

Shein and Temu were hiding behind the de minimis rule, which allowed parcels with clothing under R500 to pass through customs, paying only 20% import duty and no VAT.

This is different from local retailers, who have to pay 45% customs duty as well as 15% VAT for imported clothes.

Sars is set to have consumers who import clothing from the two online stores pay the normal 45% customs duty, even if the parcel is under R500.

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