End of tax loophole for Shein starting to have impact, say SA retailers
South Africa's closure of a tax loophole that benefited global discount e-commerce retailers Shein and Temu is starting to show positive signs as some consumers reject the higher prices, the CEOs of local fashion retailers Mr Price and TFG said on Friday.
Last November South Africa's tax authority ended the practice known as de minimis, which allowed companies to drop-ship packages valued at less than R500 from suppliers in China to consumers in South Africa, paying a flat rate of 20% in lieu of customs duties and no VAT of 15%.
Other markets including the US, UK and EU are also closing or planning to close loopholes that have given low-cost online platforms such as Shein and Temu, owned by PDD Holdings', pricing advantages.
'There's nothing punitive about them. It's just levelling the playing field so everybody trading in South Africa and importing products pays the same duties,' TFG CEO Anthony Thunström told Reuters in an interview after the company's earnings release.
Thunström and Mr Price CEO Mark Blair said it was difficult to get official data to quantify the exact impact on the fast-fashion giants. 'But our understanding is that the closure of that loophole has significantly slowed down some of the international pure play online into South Africa,' Thunström said.
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The Herald
6 hours ago
- The Herald
End of tax loophole for Shein starting to have impact, say SA retailers
South Africa's closure of a tax loophole that benefited global discount e-commerce retailers Shein and Temu is starting to show positive signs as some consumers reject the higher prices, the CEOs of local fashion retailers Mr Price and TFG said on Friday. Last November South Africa's tax authority ended the practice known as de minimis , which allowed companies to drop-ship packages valued at less than R500 from suppliers in China to consumers in South Africa, paying a flat rate of 20% in lieu of customs duties and no VAT of 15%. Other markets including the US, UK and EU are also closing or planning to close loopholes that have given low-cost online platforms such as Shein and Temu, owned by PDD Holdings', pricing advantages. 'There's nothing punitive about them. It's just levelling the playing field so everybody trading in South Africa and importing products pays the same duties,' TFG CEO Anthony Thunström told Reuters in an interview after the company's earnings release. Thunström and Mr Price CEO Mark Blair said it was difficult to get official data to quantify the exact impact on the fast-fashion giants. 'But our understanding is that the closure of that loophole has significantly slowed down some of the international pure play online into South Africa,' Thunström said.
IOL News
18 hours ago
- IOL News
TFG's robust earnings reflect strategic growth and online success
TFG's results for its 2025 financial year underscored a focus on market share growth, margin improvement and cost management, said its CEO, Anthony Thunström Image: Supplied JSE-listed international fashion, homeware and lifestyle retailer TFG's robust financial results for the year to end-March 2025 were fueled by a strong second half from TFG Africa, store expansion, and the acquisition of White Stuff in the UK. Headline earnings a share (HEPS) were up 4.6% to 1015.6 cents. The final dividend was raised by 15% to 230 cents a share. 'The result underscored a 'relentless' focus on market share growth, margin improvement, and cost management,' CEO Anthony Thunström said in a statement. The group has a portfolio of 39 leading retail brands, with over 4 900 outlets in 23 countries on five continents. 'We are targeting the opening of over 100 new stores in the coming year while optimising our existing footprint. With the Riverfields distribution centre now close to fully operational—alongside our other growth and efficiency strategies—we expect continued improvement in operating margins and capital returns in 2026 and beyond,' said Thunström. The Africa business led the charge in the past year with "exceptional" results in the second half. Online sales surged, driven by the success of the Bash platform, which had reached profitability two years ahead of schedule: 'a very likely unique achievement in the South African retail space,' said Thunström. Gross margins expanded by 150 basis points. These gains, along with disciplined cost management across divisions, translated into solid profit growth. Online sales maintained momentum and accounted for 12% of group sales, up from 9.9% the previous year. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading TFG Africa's sales were up 7% in the second half as the base normalised from the prior year's first half's clearance activity. All brands and categories showed improvement, generating full-year growth of 3.7%. Thunström said there was strong growth ahead of the market from womenswear, beauty, and jewellery, as well as recently acquired businesses, Jet and Tapestry, where the retail platform provided credit, online, and distribution capabilities. Online sales grew 43.5% and contributed 5.8% (2024: 4.2%) to total TFG Africa sales. TFG UK increased sales 16.4% in pounds following the acquisition of White Stuff from October 25, 2024. White Stuff saw 20.3% year-on-year growth for the five months post-acquisition. The addition of White Stuff to the portfolio saw store sales up 11.8% and online sales grow 22.5%. Online sales now contribute 44.8% (42.7%) of total TFG UK sales. TFG Australia faced difficult trading conditions, with sustained high inflation and interest rates impacting the consumer. Sales were 2.6% lower in Australian dollars, with a mixed performance throughout the second half in a 'highly promotional market,' Thunström said. Online sales grew by 7.3% and now contribute 8.1% (7.3%) to total TFG Australia sales.
TimesLIVE
18 hours ago
- TimesLIVE
End of tax loophole for Shein starting to have impact, say SA retailers
South Africa's closure of a tax loophole that benefited global discount e-commerce retailers Shein and Temu is starting to show positive signs as some consumers reject the higher prices, the CEOs of local fashion retailers Mr Price and TFG said on Friday. Last November South Africa's tax authority ended the practice known as de minimis, which allowed companies to drop-ship packages valued at less than R500 from suppliers in China to consumers in South Africa, paying a flat rate of 20% in lieu of customs duties and no VAT of 15%. Other markets including the US, UK and EU are also closing or planning to close loopholes that have given low-cost online platforms such as Shein and Temu, owned by PDD Holdings', pricing advantages. 'There's nothing punitive about them. It's just levelling the playing field so everybody trading in South Africa and importing products pays the same duties,' TFG CEO Anthony Thunström told Reuters in an interview after the company's earnings release. Thunström and Mr Price CEO Mark Blair said it was difficult to get official data to quantify the exact impact on the fast-fashion giants. 'But our understanding is that the closure of that loophole has significantly slowed down some of the international pure play online into South Africa,' Thunström said.
