FashionHow Shein is becoming a global fashion trendsetter

How Shein is becoming a global fashion trendsetter

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Shein is now the most downloaded shopping app on South Africa’s Google Play store. And it isn’t even trying that hard to be popular



Shein is the most downloaded shopping app on South Africa’s Google Play store. And it isn’t even trying that hard. 

The Singapore-based fast-fashion brand launched in the country at the foot of the continent during the covid-19 pandemic and is expanding via word-of-mouth and by offering first-time buyer discounts. It has already caused such a stir that local retailers are spooked and regulators are investigating if it has exploited import tax loopholes when sending parcels to shoppers. 

Taahira Khumalo, a 24 year-old receptionist in Johannesburg, says she now buys all her clothes online and Shein is a brand she keeps on returning to, lured by its competitive prices, on-trend fashion and speed of delivery.

“Shein offers really good discounts and I don’t wait long for my parcels to arrive,” she said. “Since the pandemic, technology has improved and now I really don’t need to leave the comfort of my home to shop.”

Shein, founded in China, is gaining a foothold in a nascent e-commerce market in the most industrialized country in Africa and is squaring up to US giants Walmart Inc. and Amazon.com Inc., who want to do the same.

Walmart has tried to win local hearts the traditional way, buying into domestic retail group Massmart Holdings Ltd. more than a decade ago in an expensive move that so far has failed to live up to expectations. Amazon, which has been providing Web services in the country of about 60 million people since 2004, is expected to launch its e-commerce delivery business in South Africa in coming months. 

With rapidly growing populations but little formal retail and even less Internet shopping, many retailers know they will eventually have to figure out how to make Africa work for them, and South Africa is the most obvious place to start.

“Amazon and Shein are going to accelerate online shopping in South Africa beyond recognition,” said Anthony Thunström, chief executive officer of The Foschini Group Ltd, a local retailer that owns Jet, a discount clothing chain. “South Africa has been very slow adopting digital or online shopping, so I think the competition’s good.”

South Africa has a growing middle class, nearly three quarters of the country has Internet access and more people live in concentrated urban areas than in most other nations in the region. E-commerce makes up about 4% of retail in the country meaning there are potential riches to be won.

Early mover advantage hasn’t really helped Walmart though. When the US retailer first bought into Massmart, which sells clothes, fridges and washing machines alongside tinned foods, it had ambitions to expand with stores across Africa. But subpar infrastructure and difficulties finding good real estate has dimmed that dream. 

Instead, in the last three years, it has focused on building its South African online sales and sent Sylvester John, one of its e-commerce experts, to Johannesburg with the goal to make Massmart South Africa’s top general merchandise website with same-day fulfillment. Massmart is already revamping its websites and the re-designs are focused on ensuring they’re formatted for mobile devices first, instead of desktop. That’s because of the strong preference of South African consumers to browse and shop online on their mobile devices, according to John. 

Last year the value of goods sold online by Massmart rose more than 90% to 2.3 billion rand ($120 million), helping justify Walmart’s decision to buy out the unit in preparation to go head-to-head with arch rival Amazon. Though it has yet to set a firm date for its retail launch in the country, Amazon has been advertising for local recruits in recent months. The Seattle-based company won permission in June to continue building a local headquarters near Cape Town after a halt due to a dispute with an indigenous group over the land’s traditional use. 

Global retailers’ inroads into South Africa come even as the country’s antitrust regulator examines how e-commerce prices are formulated and as the country battles with erratic electricity supply which is severely hampering economic growth.

“Africa has shown its ability to leapfrog when it comes to technology—we’ve seen this in online banking and mobile money and I think we are seeing it in purchases made with apps,” said Alec Abraham, an analyst at Sasfin Securities in Johannesburg. “While the South African economy is currently floundering, getting big players like this putting a foot in the door demonstrates the potential that sits within this market.”

Local retailers are already trying to get ahead of the latest global scramble for South Africa, expanding both what they offer online and how quickly they can deliver orders. Thunström’s TFG recently launched its fashion and lifestyle shopping platform, Bash, in just nine months.

“We realized that the future battle was going to be against the Sheins and Amazons of the world,” he said. “Normally this takes two years, but we knew we had to push to do it quicker than that and do it well.”

There are some growing concerns, however, about whether all retailers will operate on a level playing field. South Africa’s local industry association as well as the textile union have already complained to the government that they suspect Shein is possibly exploiting customs tax loopholes. 

 “We don’t mind competition as long as it’s by the rules,” said Pieter Erasmus, CEO of Pepkor Holdings Ltd, Africa’s largest clothing retailer.

Shein complies with all local laws and regulations and remains open to engage and cooperate with the South African government, a spokesperson said, adding that the retailer finds the local market interesting.

Paying far more than expected for her Shein order to pass through South African customs was Agnes Rammutla’s recent experience. The 25-year-old dentist has been buying from Shein for about a year. There was no glitch with her other six orders, but this time local authorities made her stump up more in custom duties before releasing the parcel. 

“Like me, all my friends buy online, but I guess there can be a risk,” Rammutla said.

Also read: Why H&M is taking legal action against Shein

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