South Africa’s consumer regulators are moving to close longstanding regulatory gaps in cross-border e-commerce, warning that offshore retailers are operating with limited accountability, while exposing local consumers to heightened risk.
According to a joint position paper by the National Consumer Commission (NCC) and the Consumer Goods and Services Ombud (CGSO), the rapid expansion of international online retailers into the South African market has outpaced the country’s enforcement capabilities.
The report states: “Cross-border e-commerce presents unique challenges, particularly where suppliers have no physical presence in SA and are therefore difficult to trace or hold accountable.”
It adds that in many instances, consumers are left with limited recourse when transactions go wrong, especially when dealing with sellers based outside the country’s jurisdiction.
Over the last few years, new online players have entered the market, shaking up the local landscape, which is increasingly being dominated by multinational shopping sites, such as Temu, Shein, AliExpress and Wish.
In the paper, regulators further note: “Complaints relating to non-delivery, substandard goods, misleading product descriptions, anti-competitive practices and refund delays are increasingly associated with international suppliers, underscoring the growing exposure of local consumers to offshore risks.”
Jurisdiction, enforcement constraints
The report raises a key concern: the regulators’ inability to enforce existing legislation, such as the Consumer Protection Act, against foreign-based entities due to their lack of local presence.
“The absence of a local office undermines how local services are conducted, complicates enforcement efforts and limits the ability of authorities to ensure compliance or secure redress for affected consumers. This creates an uneven regulatory environment, where offshore retailers can effectively bypass obligations that local businesses are required to adhere to.”
The report highlights the increase in “untraceable suppliers operating through digital platforms. This further compounds enforcement challenges and weakens consumer protection mechanisms.”
The NCC and CGSO have confirmed that a structured regulatory response is underway to help address these gaps. This includes the introduction of specific guidelines for offshore and cross-border e-commerce operators.
“These guidelines will require offshore platforms to meet a range of compliance obligations. This includes ensuring transparent disclosure of supplier information, adherence to local return and refund policies, and the provision of accessible dispute resolution mechanisms for South African consumers.”
The Ecommerce Forum of South Africa (EFSA) tells ITWeb that it has received a range of complaints from local retailers, including accusations of misleading advertisements, anti-competitive prices and exploiting import tax loopholes.
Temu and Shein have in the past denied any wrongdoing, noting they adhere to local laws.
Alastair Tempest, CEO of the EFSA, comments: “The main online sellers from outside SA have successfully avoided registering their companies in SA. Allegedly, the rules that should shape their behaviour are often not applied.
“This applied to all sorts of issues. For example, product standards applied by the SA Standards Bureau apparently do not apply to goods imported by individuals. Which opens the door for SA businesses to import such goods without due attention and then sell them online or in bricks-and-mortar shops.”
EFSA’s position is that any business selling between R500 000 and R50 million items into SA must register with the Companies and Intellectual Property Commission and be subject to all the laws that apply to local companies.
“We should encourage the South African Revenue Service (SARS) to treat Temu and Shein (and any other foreign online merchant) as a fiscal sovereignty issue, not only a retail one. Treasury, SARS and government should respond faster to revenue integrity risks than to sectoral complaints.
“This includes the cumulative effect of VAT leakage from ‘parcelised’ imports, and is the result of foreign platforms being able to effectively self-declare value (whereas local firms are audited annually),” adds Tempest.
Establishing local accountability
A key proposal in the position paper is the introduction of mechanisms to ensure international retailers can be held accountable within the South African regulatory framework.
“Consideration should be given to requiring foreign suppliers to establish a local point of contact or representation to facilitate enforcement and consumer redress. This would allow regulators to act more effectively in cases of non-compliance or consumer harm.”
In addition, the regulators emphasise: “All suppliers, regardless of location, must comply with the provisions of the Consumer Protection Act when transacting with South African consumers,” signalling a stricter approach to cross-border enforcement.
Ultimately, the report positions these reforms as essential to restoring balance in the digital marketplace.
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