Shein Expands to South Africa With Physical Store

The fast-fashion behemoth Shein is reportedly aiming to launch a pop-up store in South Africa as part of its ongoing global expansion.

Since its founding in China, Shein and its rival Temu have quickly expanded throughout the world to take advantage of the surge in internet sales that followed the COVID-19 pandemic.

They are accused of exploiting tax advantages by exporting modest quantities of goods made in China to avoid having to pay higher taxes. Delivering the Shein experience directly to the customer is, according to the firm, an essential part of Shein's approach.

According to the company's South African Instagram post, Shein will open its pop-up store from August 2-11 as an "exhibition space" where clients can try on current fashion and lifestyle items and purchase them online at a discounted price.

Influencers in the area were enlisted for a pre-opening marketing initiative. Bricks-and-mortar and online fashion retailers have urged South African regulators to impose a 45 percent import duty on all clothing item imports, no matter the price, to level the playing field.

Shein, which is planning to go public in Britain, taps a network of largely China-based suppliers that take small initial orders and scale up based on demand.

Shein Undergoes EU Scrutiny

Recently, Shein has also been subject to increased regulatory scrutiny as a result of the European Union's tightening of rules regarding online content. The Chinese-founded company has been classified as a Very Large Online Platform (VLOP).

The Digital Services Act (DSA) has classified Shein as a VLOP because of its fast-expanding user base, which has reached the 45 million user criterion.

Stricter rules are now in place for VLOPs like Shein to tackle dangerous and unlawful content as well as counterfeit goods on their platforms.

The EU Commission is specifically requesting that Shein address certain risks associated with illicit products and information on its platform. Shein also needs to provide annual risk assessment reports to the Commission.

Shein must also improve internal procedures, resources, documentation, testing, and risk detection activity oversight.

Shein's global head of public affairs, Leonard Lin, spoke to the media and reaffirmed the company's commitment to following the new rules while highlighting the common objective of promoting customer safety and confidence in online purchasing.

Shein, which increased its market share in the EU in August of the previous year, is currently governed by the DSA, which went into force on February 17.

Penalties for breaking the DSA can be severe; as they can reportedly amount to as much as 6% of a company's worldwide sales.

Shein's Growth

Shein's algorithm-driven supply chain allows it to launch thousands of new products onto its website each week, keeping up with current trends in fashion and providing goods at affordable prices.

According to Business of Apps, Shein's worth grew rapidly in the last several years, peaking at $100 billion in early 2022 and then falling to $64 billion in 2023.

Shein's rise to fame has not, however, been without controversy. The company's quick expansion and success in the market are clouded by charges of intellectual property issues, environmental problems, and labor rights breaches.