South Africa’s cross-border e-commerce sector is entering a slower, more competitive growth cycle, primarily as a result of the import duties introduced by the South African Revenue Service (SARS) in 2024.
This is one of the key findings of the newly-released South Africa Cross-Border E-commerce Market Outlook, compiled by Mustang Pay and developed in partnership with the South African International E-commerce Association (SAIEA).
The report draws on 2024 to 2025 customs clearance and payment data, collected through Mustang Pay’s cross-border payment and merchant network operations.
Combining this with local and global market trend analysis, the study examines the structural changes reshaping the country’s domestic and cross-border e-commerce markets in 2025.
According to the report, tax and fee adjustments introduced by SARS in 2024 have contributed significantly to a slowdown in cross-border e-commerce growth, declining to about 7% of SA’s total e-commerce transactions. This signals what it describes as the end of “indiscriminate low-price competition” in the sector.
As a result, SA has now entered a “repositioning” era, where growth is no longer driven primarily by aggressive pricing and rapid scale expansion – factors associated with global e-tailers – but is increasingly driven by customer trust, operational efficiency and delivery reliability.
“In 2025, total cross-border online orders reached 19 million, representing 18.6% of SA’s overall e-commerce transactions,” the report reveals.
“Compared with the 30% to 50% annual growth rates seen before 2025, the growth of cross-border e-commerce slowed sharply to around 7% following the tax and duty adjustments implemented in November 2024.”
According to the study, merchants are now being forced to compete on fulfilment efficiency, customer service quality and trust, instead of solely on affordability of goods.
Enter the game-changers
Over the last few years, new online players − including Amazon, AliExpress, Shein and Temu − have entered the local market, shaking up the local landscape by offering budget-friendly goods and free international deliveries.
While these global players captured a large share of SA’s cross-border market, attracting scores of local consumers before 2024, the tide is now turning.
Local e-commerce platforms − including Takealot, Makro, Bob Shop and Superbalist − are now weakening their dominance by improving fulfilment networks, increasing their product categories, introducing same-day deliveries, and offering competitive pricing without tax-related headaches, states the report.
Other factors contributing to the slowdown in global e-tailers’ sales include the tax and customs fees required to be paid by local buyers, a combination of macro-economic pressures, localisation of online retail, and heightened import barriers that have raised the cost of shopping from international sites. The South African rand’s weakness against the US dollar has made global imports significantly more expensive, especially for goods like fashion and electronics − the categories that once underpinned cross-border growth, it says.
Consumers are also placing greater emphasis on certainty around delivery, product quality and after-sales support, rather than simply choosing the lowest-priced option, the report states.
“With cross-border deliveries averaging six to eight days and higher return costs, local platforms are gaining a competitive-edge by offering faster, more predictable delivery and clear return policies,” the report states.
“The market is moving away from a model built primarily around ultra-low pricing and imported volume sales.”
Trust versus price
In September 2024, SARS introduced a 45% tariff alongside the standard 15% VAT on all imported e-commerce goods. Previously, small consignments under R500 enjoyed a loophole, as they were subject to a flat 20% customs duty with zero VAT.
The new rules were aimed at levelling the playing field for local retailers and manufacturers, which took a knock from the growing popularity of offshore e-tailers.
Consumers accustomed to low-cost, fast deliveries from platforms like Shein, Temu and AliExpress were now confronted with higher duties, processing delays and unpredictable final prices.
Shein and Temu, hampered by the new VAT and duty rules and currency volatility, are now introducing local warehousing models, and partnering with local suppliers to complement their original business models, in an effort to regain popularity.
This localisation strategy includes storing their inventory within South African borders, or in regional hubs, to mitigate the friction, and ensure faster delivery times. This trend has seen the local e-commerce market shift focus from aggressive price wars to operational efficiency.
Amazon, however, operates differently and has, since its inception in SA in 2024, been leveraging local warehouse networks, such as its South African fulfilment centres, to offer expedited one- to two-day shipping.
According to the report, operational discipline, customer retention and consumer trust are becoming more important than rapid user acquisition.
“As the market matures, success depends on more than transactions – it depends on enabling merchants to operate efficiently and build customer trust,” says Dillion Chen, CEO of Mustang Pay.
“This report is part of our commitment to providing actionable insights that support long-term growth.”
“Consumers are increasingly prioritising certainty, whether products will be delivered, match their description and be supported by reliable customer service, over simply the lowest price,” the report states.
The findings suggest this shift is creating opportunities for local retailers and platforms that can provide stronger fulfilment and transparent returns processes.
Joburg, Cape Town take charge
The report also highlights widening regional differences in e-commerce behaviour.
Tier one markets such as Johannesburg and Cape Town are leading in transaction volumes and higher-value purchases. According to the report, these cities are increasingly characterised by “brand-led, premium consumption”.
Meanwhile, tier two markets, including Durban, Pretoria and Port Elizabeth, remain more focused on value and operational efficiency.
Tier three markets, comprising townships and smaller towns, continue to be highly trust-driven and price-sensitive.
The report says these regional dynamics are increasingly shaping platform expansion strategies and logistics investments.
The report further highlights widening operational and logistical differences between urban and township markets. “In urban areas, next-day and two- to three-day delivery has become the expected service baseline.
“In township and smaller-town markets, delivery times remain between five and seven days, making pick-up, drop-off collection networks critical to overcoming accessibility and safety challenges.”
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