Podcast Summary
South Africa's new tax rule for imported clothing: South Africa's SARS implemented a new tax rule to level the playing field for local retailers against Asian competitors using a loophole for flat duty on small parcels. The new rule requires 45% duty plus VAT for imported clothing, potentially benefiting local retailers and consumers in the long run.
South Africa's revenue service, SARS, has implemented a new tax rule to level the playing field for local retailers against Asian competitors, who have been using a concession to undercut prices. This concession, which allowed for a flat 20% duty on small parcels, was given a few years ago to expedite clearance for these parcels. However, it led to increased volumes and undercutting of local retailers, who were not doing anything illegal but were negatively impacted. The new tax rule will now require a 45% duty plus fat for imported clothing, which could push up costs and potentially benefit local retailers. This ruling was necessary due to the loopholes used by Asian retailers, but it's important to note that it doesn't make their activities illegal. While it may make clothing more affordable for some, it could also have negative long-term effects on the economy. Overall, the new tax rule aims to create a fairer market for local retailers and could potentially benefit consumers in the long run.
Direct-to-consumer brands: Direct-to-consumer brands sell clothing at the same price as retailers buy it, disrupting the retail industry and providing more affordable options for consumers, but retailers still face challenges in adjusting to this new technology and way of working
Direct-to-consumer (DTC) brands are disrupting the retail industry by selling clothing at the same price as retailers buy it, cutting out the middleman. While this may make things easier for retailers, their problems do not disappear. This is a new technology and way of working, requiring adjustment. Consumers, particularly those with lower incomes, benefit from more affordable clothing. However, retailers still face challenges, and we cannot ignore the impact of these innovations on the market. It's essential to keep in mind that consumers play a significant role in shaping the retail landscape.