The National Consumer Commission (NCC) has launched a probe into Chinese e-commerce giants Shein and Temu.
Responding to questions from TechCentral on Wednesday, Prudence Moilwa, head of complaints and investigations at the commission, said the inquiry relates to possible violations of “various provisions” of the Consumer Protection Act (CPA).
“The investigation was launched in November. The two companies have been alerted of the investigation, and both have undertaken to cooperate with it,” said Moilwa.
She said the investigation was prompted by online complaints about Shein and Temu. She said the investigation will probe possible violations of the CPA related to – but not limited to – marketing, quality of products, labelling and disclosure terms (including fees).
The commission has sent questionnaires to the companies, with responses expected to be supported by evidence. Should the parties be found to be in violation of the legislation, the matter will be referred to the National Consumer Tribunal for prosecution.
In that case, Shein and Temu could in theory face administrative penalties of up to R1-million – or 10% of their annual turnover in South Africa. For serious offences, company directors could face imprisonment of up to 10 years.
Tax amendments
This is not the first time Shein and Temu have been in South African regulatory or government crosshairs. Last June, the department of trade, industry & competition introduced a new set of tax rules that saw small packages being taxed at the same rate as larger ones. The move aimed to close loopholes international e-commerce companies, including Shein and Temu, were accused of using to avoid paying tax.
“We are fully supportive of free-market dynamics, especially when they benefit entrepreneurs,” said Rael Levitt, CEO of Inospace, a logistics firm with a strong focus on last-mile fulfilment, when the rules were amended. “It is crucial that local businesses are given a fair chance to compete. These new regulations are a necessary step to ensure South African companies can operate on a level playing field.”
Read: Sars takes the shine off Shein
Despite having similar operating models, there is no love lost between Shein and Temu. Last September, Shein – the older of the two e-commerce retailers – filed papers with a federal court in Washington, DC, accusing Temu of a litany of anticompetitive practices including copyright infringement, trademark violations and trading in counterfeit goods.
Shein alleged that Temu copied designs used on clothing, such as pictures or slogans, and related to this, claimed that Temu “lifts” advertising material in the form of model photographs from Shein’s website, removed the Shein watermark and then used these images to promote copies of the same products on its own website. The matter in the US courts is ongoing.
Shein and Temu are not the only e-commerce players under scrutiny by the NCC. Although no formal investigation has been launched, the commission has warned the public about using online shopping platforms that fail the “traceability test”, often scamming victims by taking orders and then not making deliveries. At 26%, the e-commerce sector is also the sector with the highest number of complaints at the consumer ombudsman.
Read: Shein and Temu go to war
NCC said that should no unforeseen circumstances arise, it will complete the investigation into Shein and Temu by the end of its financial year, which closes on 28 February 2026. – © 2025 NewsCentral Media
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