The National Consumer Commission (NCC) has opened a detailed investigation into global e-commerce platforms Temu and Shein over suspected breaches of South Africa’s Consumer Protection Act (CPA). The development was announced during a G20 summit session held in mid-November, themed “Developments in Consumer Protection – Product Safety and Digital Markets.”
The inquiry will evaluate the companies’ advertising methods, product safety obligations, and their conduct across digital marketplace channels, particularly how they present and position their services to South African consumers.
NCC Prioritises Oversight of Digital Retailers
According to a report by MyBroadband, NCC Executive Head Prudence Moilwa confirmed that both platforms have been formally notified of the investigation. She noted that the rapid expansion of online shopping has made the sector a major regulatory priority.
“We intend to go into that space and test their compliance fully with the Consumer Protection Act. As a commission, we are signalling to the e-commerce space that we are here to hold you accountable,” Moilwa said.
The commission also highlighted that it is monitoring Temu’s local warehouse operations, though no official complaints have yet been submitted against the company. Nonetheless, the NCC believes early oversight is essential for maintaining fair competition in the retail ecosystem.
Regulatory Framework Must Match Technological Progress
Moiswa stressed that consumer protection laws must evolve in line with new technologies shaping global e-commerce. Regulators, she said, must remain equipped to enforce compliance in a fast-changing digital environment.
“We are not discouraging innovation, but we want it to be done within the lawful framework,” she noted.
Algorithmic Influence and Data Transparency Under Review
The NCC is also examining how Temu and Shein use algorithms and consumer data to influence purchasing behaviour. The commission is particularly concerned about the source of the data these platforms gather, the extent of data collected, and how automated systems use that information to target shoppers.
Moiswa acknowledged that personalised recommendations can be useful for consumers and beneficial for sales, but emphasised that shoppers must still have the freedom to make independent decisions.
She said platforms must be clear about:
- The specific data they collect
- Their methods of data collection
- How their algorithms use data to shape consumer choices
E-Commerce Growth Prompts Stricter Monitoring
South Africa’s online retail sector is expanding rapidly, supported by internet penetration reaching 74.7% in 2024 and strong growth forecasts extending through 2033. This booming market continues to attract international players looking to strengthen or establish their presence.
As part of its localisation efforts, Temu rolled out support for multiple South African languages, including Zulu, earlier this year.
With Chinese e-commerce companies accelerating their operations in the country, the NCC is intensifying enforcement to ensure consumer protection, fair competition, and full adherence to the Consumer Protection Act.
