In the ever-evolving landscape of retail, where the convenience of online shopping has become a staple in our daily lives, a storm is brewing on the horizon, and it’s caught the attention of one of Australia’s retail magnates. Gerry Harvey, the billionaire behind the Harvey Norman empire, has sounded the alarm on the practices of discount Chinese online retailers Shein and Temu, calling for nothing less than a government inquiry into their operations.
These online marketplaces, which have been luring Australian consumers with their rock-bottom prices, have not only disrupted the local retail scene but have also raised concerns about their business ethics and product safety. Shein made its debut in Australia in 2022, followed by Temu in 2023, and since then, they’ve been giving local businesses a run for their money, intensifying competition and potentially undermining the Australian retail industry.
Harvey, who has seen his fair share of market battles, has branded these companies as ‘pariahs’ that dodge tax obligations and fail to contribute to local employment. His call for an inquiry comes at a time when Australian retailers are already grappling with the colossal presence of Amazon, which reported a staggering $3 billion in sales in 2023 alone.
The Harvey Norman chair’s concerns are not unfounded. The rise of online marketplaces like Amazon, Temu, and Shein has been a double-edged sword. While they offer consumers a plethora of choices at seemingly unbeatable prices, they also pose a significant threat to local businesses. Harvey’s resounding ‘yes, yes, and yes’ in response to whether these platforms are killing off local businesses speaks volumes about the urgency of the situation.
The issue goes beyond competitive pricing. Recent incidents have put Temu, in particular, under the microscope for product safety. A harrowing event saw an eight-year-old girl from Queensland suffer severe burns due to a jumper purchased from Temu, prompting a recall and a flurry of communications between the company, the family, and the merchant involved. This incident has led to Temu pledging to adhere to stricter product safety regulations in collaboration with the Australian consumer watchdog.
But Temu is not alone in facing scrutiny. Other major online retailers, including Amazon, AliExpress, eBay Australia, and MyDeal.com.au, have previously made commitments to tighten product safety measures. Despite these pledges, Harvey suggests that consumers might find ‘a lot more comfort’ in purchasing from trusted brands, even if it means paying a bit more.
The allure of these online marketplaces is undeniable. According to data from Roy Morgan, an astonishing 3.8 million Australians aged 14 and above have shopped from Temu in the 12 months leading up to August 2024. Together, Shein and Temu are estimated to have nearly $3 billion in annual sales in the year to last June. But at what cost?
Harvey raises a concern about the lack of transparency in the origins of these products. While the online images may appear appealing, the actual quality and safety of the products could be quite different. The lure of low prices is strong, but it’s important to weigh the potential risks and the broader impact on the Australian economy.
Have you had any experiences with products from these online retailers? Do you think a government inquiry could benefit the Australian retail landscape? Share your thoughts in the comments below—we’d love to hear your perspective on the future of shopping in Australia.
Also read: Temu actively engages with ACCC for product safety pledge following safety incident
