The growing impact of illicit trade and offshore e-commerce platforms on South Africa’s economy will take centre stage at the upcoming Buy Local Summit & Expo in Johannesburg.
Hosted by Proudly South African, the two-day event will take place on March 16 and 17 at the Sandton Convention Centre and will bring together government leaders, industry executives, entrepreneurs and organised labour to discuss challenges facing local industries.
The summit comes amid mounting concerns about illicit trade and the growing influence of international online retailers in South Africa.
A 2025 study by Euromonitor International titled Understanding the Illicit Alcohol Market in South Africa found that illicit alcohol accounts for 18% of the country’s total market volume, representing an estimated R25bn annually.
Fiscal losses to the state reached about R16.5bn in 2024.
Offshore e-commerce platforms are also reshaping the retail landscape.
A report released last year by the Localisation Support Fund found that the rapid growth of international online retailers has resulted in millions of rand in lost sales and thousands of potential jobs disappearing from the manufacturing sector.
According to the report, global platforms Shein and Temu have collectively generated about R7.3bn in sales in South Africa, resulting in about R960m in lost local manufacturing sales.
The report also estimates that between 2020 and 2024 the growth of these platforms prevented the creation of 2,818 manufacturing jobs and 5,282 retail jobs.
The retail clothing, textile, footwear and leather (R-CTFL) sector has also seen declining sales, dropping from R117bn in 2011 to R105bn in 2024.
While the sector’s decline could be linked to reduced clothing purchases, the report suggests a more likely explanation is a shift towards cheaper imported clothing amid rising living costs.
Online retail in the sector has grown sharply over the past decade.
In 2015, R-CTFL e-commerce accounted for only 2.4% of the total market (R3.5bn), but by 2024 this had increased to 9.9% or about R20.1bn.
CEO of Proudly South African Eustace Mashimbye said the first day of the summit will focus on illicit trade and unfair trade practices affecting local industries.
“We have discussions around the illicit economy. It’s a big, big problem. But what we’ve done is we’ve said, let’s rather talk about all unfair trade practices as one topic, knowing that our focus is on illicit trade because there are companies we know of that have been affected by this,” said Mashimbye.
He said industries including pharmaceuticals, sugar and alcohol are among those hardest hit.
“Whether it’s pharmaceuticals, the sugar industry that has seen dumping from foreign markets, or alcohol. They are telling us that an overwhelming percentage, close to 50% of the alcohol in this country, is now in the illicit market,” he said.
Mashimbye said the discussion will be held in partnership with South African Breweries and will bring policymakers into the conversation.
“What we’re trying to do is engage policy decision makers to get responses on how to deal with this. There are solutions we have seen in other countries that have been able to address this successfully,” he said.
The summit will also include a protest march aimed at highlighting the impact of illicit trade on businesses and workers.
“We also have a protest. We are marching. We want as many people as possible to walk the streets with us. Even if you’re wearing a suit for the conference, please join us in a suit,” he said.
“We want to show that the people who are affected by the illicit economy are real businesses. The unions have also asked to join us because they represent workers from companies that are closing down or placing workers on short time because of dumped imports.”
Mashimbye said discussions will also focus on the growing influence of offshore e-commerce retailers.
“We also have a conversation that talks about the impact of offshore e-commerce retailers like Shein and Temu. There are people who still buy from those platforms, some say because of the prices, despite concerns that the quality is not always right,” he said
Mashimbye said studies conducted through the Localisation Support Fund show the long-term consequences could be severe.
“There are 8,100 jobs that have already been displaced and another 22,000 more will be displaced if we keep buying from those platforms.”
He said the summit will assess how far government and industry have progressed in implementing recommendations from the study.
While the first day of the summit will focus on illicit trade and unfair competition, the second day will centre on supporting small businesses and localisation.
Mashimbye said the event has already helped many local brands break into major retail markets.
“Many years ago, I can’t remember whether it was the second or third edition of this expo. Spar found Sihle’s Brew and listed it in all their Gauteng retail outlets. Over time it grew,” he said.
“There are many others like that. Another example is Portia M, which was discovered by Clicks at our event. Many women now use the product because it’s easy to access in retail spaces. Without this platform people would not have discovered it.”
Acting director-general of the department of small business development Thulisile Manzini said the government is working with Proudly South African to expand market access for small businesses.
“We are ensuring that a product made in South Africa, in a township or rural area, has a clear path to the shelves of national retailers,” she said.
Manzini said more than 200 MSMEs have received Proudly South African membership through the partnership, enabling them to access marketing platforms and new markets.
However, she warned that illicit and counterfeit goods remain a major threat to legitimate businesses.
“Illicit trade creates an unfair and distorted marketplace where legitimate businesses, particularly MSMEs, are forced to compete with products that do not comply with the same rules and standards.
“The consequences are severe — government loses tax revenue, manufacturers lose market share, small businesses struggle to remain competitive, and jobs are lost,” she said.
Chief marketing officer at Proudly South African, Happy MaKhumalo Ngidi, said supporting local businesses ultimately strengthens communities.
“When you buy local, you support a neighbour’s passion, not a corporate’s bottom line. When you spend your rands with these entrepreneurs, you help keep communities alive and give fellow South Africans a sense of purpose,” she said.
TimesLIVE
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.