The National Consumer Commission (NCC) has launched formal investigations into global fast-fashion giants Shein and Temu, signalling a more assertive regulatory stance towards rapidly expanding e-commerce platforms.
The move was confirmed during last week’s G20 webinar, “Developments in consumer protection – product safety and digital markets”, where NCC executive head Prudence Moilwa outlined the regulator’s priorities for the next five years.
Moilwa said e-commerce has become one of the NCC’s strategic focus areas and confirmed that both platforms have been served with notifications of investigation. The Commission intends to assess their compliance with the Consumer Protection Act (CPA), particularly regarding marketing, product safety, and the accuracy of digital-market representations.
“We intend to go into that space and test their compliance fully with the Consumer Protection Act,” she said. “As a Commission, we are signalling to the e-commerce space to say that the Commission is here to hold you accountable.”
E-commerce growth tests consumer protection readiness
Moilwa said although digital transformation has reshaped how South Africans engage with products and platforms, the country’s regulatory framework remains robust.
“Within the context of the digital markets and digitisation, we must rest assured that we do have legislation that covers all aspects, especially for consumer protection purposes,” she said.
But legislation alone is not enough. The greater challenge, she emphasised, is regulatory readiness. As technology evolves, regulators must keep pace so that enforcement remains effective.
“The issue is for regulators to be ready to be able to implement this within the context of the development within the e-commerce, as well as digital markets,” she said. “We are not discouraging innovation, but we want it to be done within the lawful framework.”
Algorithms under scrutiny
One of the NCC’s growing concerns is how algorithms shape what consumers see, buy and engage with. Moilwa said platforms must be transparent about the data they collect and how automated systems use it to target consumers.
She referenced the Australian case where the Australian Competition and Consumer Commission confronted Google for tracking users’ location data despite settings that appeared to disable it. The case, she said, highlighted the importance of clarity and consent. The Protection of Personal Information Act remains clear on this point: if a platform collects someone’s data, “I need to at least have some knowledge with regard to what you’re going to use it for. And I have to agree.”
Although algorithms allow businesses to personalise marketing, Moilwa warned that consumers must be given a genuine opportunity to make informed choices. The NCC plans to analyse what South Africans are exposed to online and will engage suppliers who rely heavily on algorithm-driven advertising.
Consumer Goods and Services Ombud (CGSO) Lee Soobrathi also said the regulators need greater transparency on how digital platforms use algorithms to prioritise products and content.
“As we sit here, our phones are probably buzzing with certain types of adverts,” he said, adding that these ads often match consumers’ online behaviour so precisely that many wonder how platforms know their preferences.
Soobrathi said the CGSO is not calling for access to proprietary algorithms.
“No one is asking or requesting trade secrets… all I think one is asking for is what informs the type of advertising that you are doing,” he said. He argued that basic disclosure would help consumers understand why certain messages reach them and would help regulators to anticipate complaint trends.
Recent CGSO cases illustrate the urgency: scams involving influencers, cloned social-media accounts and fake online stores are increasing, often mimicking legitimate businesses. These schemes entice consumers to share card details, pay deposits or apply for fraudulent jobs, exploiting the same algorithmic systems that legitimate retailers use.
Soobrathi said transparency could also expose smaller operators gaming the system.
“How do we do this, and how did we arrive at this outcome?” he asked. Knowing this, he said, is essential for consumer protection.
How consumer behaviour has shifted
The CGSO’s complaints data shows how dramatically the digital landscape has changed. At the start of the pandemic, e-commerce disputes made up only 2% of the CGSO’s caseload.
“Now fast forward to 2025,” Soobrathi said, “that’s triggered all the way to around 28% to 30%.”
He said the surge reflects how deeply online purchasing has penetrated the market – from accommodation bookings to goods delivered “in 60 minutes”. With this comes higher expectations: “When consumers land at our shores being disgruntled, they want resolution right now, right here,” he said.
Almost all consumers now log complaints electronically.
“Ninety-nine percent of our consumers are logging complaints to online platforms, to applications,” Soobrathi said, proof that South Africa now has a fully digitised consumer base.
Although the CPA and Electronic Communications and Transactions Act remain strong, the pace of technological change means many transactions now involve a web of intermediary services, platforms, logistics partners and micro-retailers – often without consumers realising how many parties are involved. The challenge, he said, is bringing “everybody into the frame of compliance, from grassroots all the way to the larger providers”.
He added that cross-border e-commerce complicates this even further. Shein, Temu, and other foreign platforms sell into South Africa but operate beyond its borders. Still, their impact is local.
“They do consume here. They do purchase here, and the experience is here,” Soobrathi said. Platforms must therefore comply with South African standards, not just global ones.
Offshore platforms and the threat to local jobs
Irshaad Kathrada, the chief executive of the Localisation Support Fund, warned that offshore e-commerce platforms are quietly eroding South Africa’s manufacturing base, threatening jobs and weakening supply-chain resilience.
“Manufacturing has shown itself, not only in South Africa but around the world, to be a real engine of growth,” he said.
The organisation estimates that about 8 000 retail and manufacturing jobs have been lost over the past five years due to offshore platforms capturing local market share. If left unchecked, Kathrada warned, South Africa could “lose as many as 35 000 jobs by the end of this decade – and that’s only five years away”.
Countries such as the United Kingdom, India, Turkey, and Indonesia are already tightening regulations, he said. South Africa may need similar interventions.
Kathrada said localisation and consumer protection must be seen as interconnected. Locally produced goods give authorities visibility of supply chains, quality control and safety practices, while offshore sellers often exploit gaps in standards and tax regimes. The proliferation of small-parcel imports, he said, poses serious risks.
Localisation is also about economic and social stability. Heavy reliance on foreign platforms exposes consumers to shipping delays, currency volatility, and geopolitical shocks.
“A diversified local industrial base helps to stabilise prices and ensure availability of essential goods,” he said.
Digital markets do create opportunities for small businesses, but Kathrada said regulation must evolve as quickly as the marketplace. The objective is not only to protect consumers but to ensure “a vibrant local manufacturing ecosystem that can grow off the back of that”.
Caution, accountability, and a more informed consumer
As the discussion closed, the speakers agreed that consumers need to take a more cautious and informed approach to digital markets – particularly ahead of Black Friday and the festive season.
Soobrathi urged South Africans to verify before they buy.
“I cannot stress this enough – confirm, verify, and ensure that you are dealing with the person or entity you think you are dealing with,” he said. AI can speed up tasks, but “don’t depend on it holistically”, he warned. When problems arise, “call on your regulator… we are here to assist you as best as we can”.
Moilwa echoed the call for vigilance. Consumers and policymakers must interrogate what they see online and understand the limits of AI-generated information.
“If AI gets it wrong, you cannot run away from your own responsibility,” she said. Reading, researching, and cross-checking remain essential in a world where “people think AI is here to take over our responsibility to think”.
Kathrada emphasised that consumer awareness must evolve with digital markets. Even pricing is becoming harder to decipher, particularly where offshore platforms fail to disclose full, all-inclusive costs. Legislation requires retailers to show “exactly what you will be paying without any fine print”, he said – yet many do not. Consumers can easily end up with unexpected tax bills from the South African Revenue Service.
He added that rising inequality and economic insecurity make consumers more vulnerable to fake ads and misinformation, underscoring the need for a strong industrial base and well-enforced consumer standards.
His final message tied consumer protection to broader economic resilience.
“There is no consumer if there is no industry to provide jobs,” he said.
