South African e-tailers are facing stiff competition from international companies — though Bash, the e-commerce platform of JSE-listed retailer TFG, appears to be gaining traction with its “local is lekker” stance.
Tech-savvy local Gen Z shoppers have become adept at hunting for deals from Shein and Temu. These Chinese-backed marketplaces attract price-conscious shoppers with trendy products at rock-bottom prices.
In South African, Shein and Temu have gained popularity as online shopping platforms. Despite their similarities, they use different business models.
Temu operates as a digital marketplace that allows independent sellers to offer a wide range of products, including electronics, clothing and seasonal decorations. This model offers South African consumers a wide selection of items from different sellers. Shein, on the other hand, specialises in designing, producing and selling its own fast-fashion and accessories brands. Shein offers a more consistent and brand-focused shopping experience.
Despite the formidable presence of Temu and Shein, Bash has emerged as a powerhouse in the South African online retail landscape. It also competes against local giants such as Takealot’s Superbalist and Jumia’s Zando. Superbalist offers a wide range of fashion, beauty and home décor products, while Zando has an extensive range of clothing and accessories from local and international brands.
Bash, launched 16 months ago, sells local and international sports and fashion brands including Adidas, Converse and Puma.
TFG said the success was largely attributable to Bash and CEO Anthony Thunström said the expected break-even point for the e-commerce platform had been brought forward
Last week, in its results for the year to end-March, TFG announced that its online retail turnover was up 22% year on year at R5.6bn, contributing 9.9% to the total retail turnover of R60bn.
TFG said the success was largely attributable to Bash and CEO Anthony Thunström said the expected break-even point for the e-commerce platform had been brought forward.
Even more encouraging for TFG is that Bash is now the No 1 fashion and lifestyle retailer in the country, supported by 3.5-million app downloads. It saw a 45% increase in first-time shoppers. Significantly, full price sales increased 63% and multiband sales increased 83%, demonstrating the cross-shop opportunity and power of a single platform for customers to shop TFG’s brands.
Bash commits to providing a seamless omnichannel experience.
TFG invested R10bn over the past two years in its “Bolts” strategy to create an ecosystem centred on omnichannel and a demand-driven supply chain.
Bash, which provides a single e-commerce home for all TFG brands and leverages its extensive product catalogue and customer reach to create a world-class omnichannel experience, is closely aligned with the Bolts strategy.
TFG’s results suggest Temu and Shein are not crimping Bash’s performance.
Bash has enabled TFG’s customers to access a world-class, global pureplay platform and receive delivery within a week or two. Now, its goal must be to deliver to customers within hours or minutes and respond to fashion trends much faster than others. Hopefully, this will be possible once BashDelivery, a last-mile courier service for online orders from TFG, is fully operational.
In 2018 TFG launched MyTFGworld, which aimed to reposition the group’s e-commerce strategy with a marketplace to rival global online retail platforms.
MyTFGworld was rebranded into Bash, which is now supported by 350 shops nationwide.
Bash will likely benefit from the department of trade, industry & competition’s initiative to tax small parcels from international e-commerce merchants at the same rate and harmonise tax rates with those applicable to larger orders.
It has been reported that Shein and Temu have been exploiting tax loopholes to gain an unfair advantage in the local market by splitting large shipments into several smaller parcels.
In South Africa, duty and VAT of 45% are levied on imported clothing exceeding the value of R500. Previously, duty on parcels below this threshold was minimal. However, from July 1 these parcels will be subject to the same duty rate — 45% plus VAT — as higher-value shipments.
TFG’s bold move into online retail is paying off, reshaping the local market and offering consumers a compelling alternative to global platforms. One can only hope that other local clothing retailers will have to learnt from its success so far and continue to innovate.
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