The billionaire chairman of Harvey Norman Gerry Harvey is proposing a government inquiry into the operations of ultra-cheap retailers Shein and Temu.
As well as accusing the two Chinese online discount stores of frequently selling unbranded merchandise from unknown manufacturers of dubious quality, Harvey claims Shein and Temu are “pariahs” that are killing off local businesses.
“There should be a government inquiry into it as to what ramifications are there and whether they should or shouldn’t do something about it,” said Harvey who has amassed as estimated fortune of $3.39 billion from his electrical good and furniture chain.
“It’s a real worry, do you let it just go or not, I think it’s worth an investigation.”
In addition to the pressure local businesses were already facing from U.S. giant retail Amazon, Harvey said the onslaught of Shein and Temu presented a very difficult situation for Australian retailers to combat.
Since beginning operations in Australia in 2022 and 2023 respectively, Harvey also claims Shein and Temu offer little benefit to the Australian economy by neither paying tax nor employing Aussies.
Harvey warned shoppers that online pictures of heavily discounted products may not accurately represent the products when they actually arrive.
“… there’s a lot of online retailers selling some of the stuff we sell but it’s unbranded, you don’t know which factory it’s made in,” he said.
“… whether the picture is as good as the product might be another thing.”
Roy Morgan revealed 3.8 million Australians had bought from Temu in the 12 months to August 2024, while two million had made a Shein purchase.
It’s understood that the majority of sales were from repeat customers.
Overall, both Chinese retailers Shein and Temu have amassed around $3 billion in Australian sales in the year to last June, the same annual figure reported by Amazon for its Australia sales in 2023.
e-commerce company Temu, now the most-downloaded app in the U.S. has been the subject of headlines about allege safety issues with some of its products sold in Australia.
Putting a brave face on the encroachment of overseas-based online discount stores, the Australian Retailers Association reminded retailers that one of the drawcards of in-store shopping - which accounts for 80% of purchases – is their high-quality, locally sourced goods.