The South African government said Monday that it is investigating the popular fast-fashion company Shein after receiving complaints from the local textile union and industry association that it might be exploiting tax loopholes to gain an unfair advantage.
According to The Wall Street Journal, a spokesman for the Department of Trade, Industry, and Competition declined to provide details on the investigation but said that it had been initiated in response to concerns raised by labor and industry groups.
The issues raised appear to be over Shein and other Chinese retailers taking advantage of a loophole in SA customs law that allows them to import goods without paying tariffs.
The online Chinese fast fashion store has its headquarters in Singapore. It was founded in October 2008 as ZZKKO by entrepreneur Chris Xu. It became the world's largest fashion retailer in 2022.
This is not the first time the company has made headlines. In the past it has been under scrutiny for allegedly exploiting workers, paying them low wages, and subjecting them to inhumane working conditions.
In 2020, a group of workers from Shein's factories in Bangladesh went on strike to protest against the company, the strike was part of a larger movement in the garment industry which has long been criticized for exploiting workers.
