Shein & Temu: How Ultra-Cheap Online Retailers Are Disrupting Local Businesses
The retail landscape in Australia is undergoing a major shift, with ultra-low-cost Chinese retailers Shein and Temu making waves in the market. Their rapid rise has sparked debate among industry leaders, including Australian retail mogul Gerry Harvey, who is calling for a government inquiry into their business practices.
The Impact on Australian Retailers
Shein and Temu entered the Australian market in 2022 and 2023, offering heavily discounted products that have intensified competition for local businesses. With their aggressive pricing strategies, these platforms have made it increasingly difficult for traditional retailers to compete. The challenge is not just about price but also about the broader implications for employment, taxation, and product safety.
The Call for a Government Inquiry
Gerry Harvey, chair of Harvey Norman, has voiced strong concerns, stating that these platforms operate without paying local taxes or employing Australian workers. He believes a formal government inquiry is necessary to assess their long-term impact on the retail industry.
“They never pay any tax here, they don’t employ anyone, It’s a very difficult situation for Australian retailers to combat.”
Product Safety Concerns
In addition to economic concerns, product safety has also come under scrutiny. Temu recently faced backlash after an incident involving a defective product resulted in a severe injury to a child. This has raised alarms about regulatory oversight and consumer protection, leading to increased pressure on online marketplaces to commit to stricter safety standards.
What This Means for Local Brands
The rise of Shein and Temu highlights the growing consumer demand for affordability and convenience. However, local businesses still have key advantages, such as trust, quality, and customer experience. To stay competitive, Australian retailers should focus on:
- Strengthening brand trust – Emphasising ethical sourcing, quality products, and excellent customer service.
- Omnichannel strategies – Creating seamless shopping experiences across online and offline channels.
- Leveraging pop-up stores – Temporary retail spaces allow brands to test new markets, engage customers face-to-face, and create unique in-person experiences that online-only stores can’t replicate.
- Focusing on local production – Highlighting Australian-made products and sustainable practices to attract conscious consumers.
Pop-up stores, in particular, provide an agile way for businesses to build brand awareness and connect with customers in high-traffic locations. They also offer a lower-risk opportunity to experiment with physical retail before committing to a permanent lease.
The Future of Australian Retail
The rise of ultra-cheap online retailers like Shein and Temu presents both challenges and opportunities for Australian businesses. While these platforms attract price-conscious shoppers, they also raise concerns about fair competition, product safety, and local economic impact.
For retailers looking to stay competitive, focusing on brand trust, customer experience, and omnichannel strategies will be key. Offering unique in-store experiences, prioritising quality, and leveraging local supply chains can help businesses differentiate themselves in an evolving market.
At PopHub, we support Australian retailers by providing flexible pop-up opportunities that help businesses connect with customers in meaningful ways. Whether you’re looking to test new markets, strengthen your brand presence, or adapt to retail trends, PopHub is here to help you succeed.
Want to explore how we can support your business? Contact us.
Australian Retail Market & Shein/Temu Impact
- Research on Online Shopping Trends
- Australian Competition & Consumer Commission (ACCC) on Product Safety
- Australian Retailers Association (ARA) News & Advocacy
Shein & Temu’s Presence in Australia
Pop-Up & Retail Growth Strategies