The growing impact of illicit trade and offshore e-commerce platforms on South Africa’s economy will take center stage at the upcoming Buy Local Summit and Expo in Johannesburg.
Organized by Proudly South African, the two-day event will take place at the Sandton Convention Center on 16 and 17 March and will bring together government leaders, industry executives, entrepreneurs and organized labor to discuss the challenges facing local industries.
The summit comes amid growing concerns about illicit trade and the growing influence of international online retailers in South Africa.
A study conducted by Euromonitor International titled Understanding the Illicit Liquor Market in South Africa 2025 found that illicit liquor accounts for 18% of the country's total market volume, representing an estimated R25bn annually.
The state's fiscal deficit is projected to reach approximately R16.5bn in 2024.
Offshore e-commerce platforms are also reshaping the retail landscape.
A report released last year by the Localization Assistance Fund found that the rapid growth of international online retailers has resulted in millions of rands 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 approximately R7.3bn in sales in South Africa, resulting in a loss of approximately R960m in local manufacturing sales.
The report also estimates that the growth of these platforms prevented the creation of 2,818 manufacturing jobs and 5,282 retail jobs between 2020 and 2024.
The retail textile, clothing, footwear and leather (R-CTFL) sector also saw a decline in sales, falling from R117bn in 2011 to R105bn in 2024.
Although the sector's decline could be linked to lower purchases of clothing, the report suggests there is more likely a shift towards cheaper imported clothing amid rising living costs.
Online retail has grown rapidly in the region 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 was expected to grow to 9.9% or approximately R20.1bn.
Proudly South African CEO Eustace Mashimbe said the first day of the summit would focus on illicit trade and unfair trade practices affecting local industries.
“We've had discussions around the illicit economy. It's a big, big problem. But what we've done is let's talk about all unfair trade practices as a topic, knowing that our focus is on illicit trade because there are companies that we know have been affected by it,” Mashimbe said.
He said industries including pharmaceuticals, sugar and liquor have been most affected.
“Whether it's pharmaceuticals, the sugar industry that has seen dumping from foreign markets, or liquor. They are telling us that a large percentage of liquor in this country, about 50%, is now in the illegal market,” he said.
Mashimbe said the discussion would be conducted in partnership with South African breweries and would include policy makers in the conversation.
“We are trying to engage policy decision makers to get feedback on how to deal with this. There are solutions that 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 trafficking on businesses and workers.
He said, “We also have a protest. We are marching. We want more and more people to walk on the streets with us. Even if you are wearing a suit for the conference, please wear a suit and join us.”
“We want to show that those who are affected by the illicit economy are real businessmen. Unions have also asked to join us because they represent workers at companies that are closing or laying off workers for short periods of time because of dumped imports.”
Mashimbe said the discussion would also focus on the growing influence of offshore e-commerce retailers.
“We also had a conversation talking about the impact of offshore e-commerce retailers like Shein and Teemu. 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.
Mashimbe said studies conducted through the Localization Support Fund show that the long-term consequences could be serious.
“There are 8,100 jobs that have already been displaced and 22,000 more jobs will be displaced if we continue to buy from those platforms.”
He said the summit would assess how far the government and industry have progressed in implementing the study's recommendations.
While the first day of the summit will focus on illegal trade and unfair competition, the second day will focus on supporting small businesses and localisation.
Mashimbe said the event has already helped many local brands enter key retail markets.
“Several years ago, I don't remember if it was the second or third edition of this expo. Spar found Sihle Brew and listed it in all their Gauteng retail outlets. Over time it grew,” he said.
“There are many others. Another example is Portia M, who was discovered by Clicks in our program. Many women now use the product because it is easier to access in retail locations. Without this platform, people would not have discovered it.”
Thulisile Manzini, acting director-general of the Department of Small Business Development, said the government is working with Proudly South African to expand market access for small businesses.
“We are ensuring that a product made in a township or rural area in South Africa has a clear path to national retailers,” he said.
Manzini said more than 200 MSMEs have proudly received South African membership through the partnership, helping them access marketing platforms and new markets.
However, he warned that illegal and counterfeit goods remain a major threat to legitimate businesses.
“Illicit trade creates an unfair and distorted marketplace where legitimate businesses, especially MSMEs, are forced to compete with products that do not follow the same rules and standards.
“The consequences are dire – governments lose tax revenue, manufacturers lose market share, small businesses struggle to remain competitive and jobs are lost,” he said.
Proudly South African chief marketing officer, Happy Makhumalo Ngidi, said supporting local businesses ultimately strengthens communities.
“When you buy local, you support a neighbor's passion, not a corporate's bottom line. When you spend your money with these entrepreneurs, you help keep communities alive and give fellow South Africans a sense of purpose,” she said.
Times Live