Cheap online shopping costing SA jobs

Cheap online shopping is crippling the South African jobs market and threatening the existence of locally-made goods.

Cheap online shopping is crippling the South African jobs market and threatening the existence of locally-made goods.

Published Apr 14, 2024


Durban — Surf, click, deliver: That’s how easy it is to buy cheap goods like clothing from online stores based in foreign countries – but it’s devastating South African manufacturing and costing jobs.

Experts say cheaper online stores are pricing locally manufactured goods out of the market and could lead to many job losses; not only in manufacturing, but in warehouses, malls and physical stores as well.

Professor Pfano Mashau from the University of KwaZulu-Natal Graduate School of Business and Leadership said the government should subsidise local companies so they can lower prices and compete with international websites like Temu and Shein.

“In South Africa with its labour law, it’s more expensive to produce goods here and if I’m going to get into the textile industry, there’s definitely no way I’ll compete with the Chinese.

“It calls for government policies to protect South Africans in industries that are more vulnerable to open markets, so jobs are definitely going to be lost ... they will need some form of subsidy for them to be competitive. They will need flexible labour laws to enable them to employ people temporarily so they don’t have high salary costs.”

Mashau said the retraining and reskilling of workers had to take place to keep up with new and emerging forms of employment.

He said one South African company manufactured shoes which sold for an average price of R1 200, but online, a similar pair of shoes without the brand name could be bought for between R150 and R200.

“It means I can buy it for 10% of the price, so the next time I won’t be buying a South African-made product.

“Some of these companies are about to go out of the market because of the high cost of producing these shoes and the high cost of hiring shops in the mall and that’s where people are employed. They’re going to lose employment; it’s something we cannot avoid in these times that we live in,” Mashau said.

Cosatu spokesperson Matthew Parks said imports, especially in the textile industry, had caused massive job losses locally in the last few years. More than that, he expressed organised labour’s concern about how it remained easier for imports to make their way to the country without paying duties.

According to Parks, the emergence of the online industry had also posed another challenge in an already difficult jobs market: “When you have local online retailers, you have a face and a person you can negotiate with. However, it is a different ball game altogether when such a retailer is foreign-based, as is the case right now.”

Parks said they would use every available avenue to advocate for locally produced goods to be protected against foreign imports in all sectors.

“If we can get the government, the mining sector, the retailing industry to all buy locally made goods, we can protect and even create jobs and that is why this struggle needs to be constantly waged.”

Global data and business intelligence platform Statista said the number of online shoppers in South Africa was directly proportional to the number of internet users in the country.

It said in 2022, nearly 80% of South Africans used the internet and there were 27 million e-commerce users. By 2027 these figures were expected to leap by about 10%. It said most of the online buying in the country was in fashion, toys, hobbies and DIY.

“Fashion accounted for 32% of the total value within the e-commerce market in 2022. Toys, hobbies, and DIY followed at 27%, whereas electronics and media, furniture and appliances, as well as food and personal care, registered 18, 15, and 8%, respectively,” it said.

According to Statista’s Global Consumer Survey, (various categories) and Clicks (pharmacy) were the most popular online shops as of March 2023. Statista said the 2022 survey showed that more than 70% of South Africans said they did online shopping because of the “direct delivery to my home”.

“Some 63% indicated buying online to avoid crowds, whereas roughly 45% did so because of lower prices,” it said.

Mashau said many well-known South African brands also had online stores and most businesses were heading in that direction, again costing jobs.

“So the risk of buying online is outweighed by the benefits of buying online. I mean, it’s also unsafe out there, there’s crime and all that and a lot of people are even buying from local stores, but online.”

While some jobs will be lost, Mashau said it would open avenues to other forms of employment. Online stores were creating jobs for people delivering goods from warehouses to homes. Unfortunately, he said, many foreigners and not South Africans were grabbing these opportunities and this was also a side hustle for many people who were already employed and needed a second income, rather than attracting the unemployed.

Dr Colin (Surendra) Thakur from the Durban University of Technology urged shoppers to be cautious when they bought online goods, saying the nature of internet engagement was fraught with cyber security issues. He warned that if a deal seemed too good to be true, then it probably was.

“The moment you engage with somebody you don’t know, there is an inherent risk of that particular person, a particular website tracking you, finding out information about you, and also you’re exchanging information; your name, your address, things like that. So somebody can put up a very beautiful template just to phish information from you, so you really have to be careful about the integrity and the veracity of a website.”

Thakur said while online reviews were helpful, if reviews were too positive it immediately made him suspicious and sometimes it was better to wait before buying online goods and learn from the experience of others.

“The thing about all these glowing positive reviews is that you don’t really know if it’s a true customer or not. The company could just create its own list of ghost customers. So my personal rule of thumb is that if I see the reviews for a particular product and it’s all in the fours and the fives, I immediately get suspicious. It’s the nature of service business for someone to say the box took too long to come etc.”

Independent on Saturday