Temu, a cross-border electrician platform, announced the establishment of the first local warehouse in South Africa, its first major infrastructure investment since its entry into the South African market in January 2024. This is aimed at improving distribution efficiency, reducing operating costs and deepening the localization of African markets.
South Africa is a key hub for the African electricity market, with a projected retail value of $6 billion in 2024, representing more than 20 per cent of the African market. From January 17, 2024, Tamu entered South Africa and rapidly attracted consumers with low-cost strategies and up to $1 billion in marketing inputs (a 100 per cent increase in the global advertising budget in 2023), with live monthly users approaching their competitors, Shein. Traditional, cross-border direct mail modes (direct shipments from China) lead to longer average distribution times (7-14 days) and high logistics costs in South Africa, especially during the active season. Local warehouses store goods in South Africa, replacing long customs clearance and transport processes for cross-border direct mail. Temu claims that “local” labeled commodities can be delivered for 2-4 days, with some support reaching the next day, significantly better than the previous 7-14 days.
Local warehousing supports the rapid distribution of large commodities such as furniture and household goods, which were previously difficult to cover owing to cross-border logistics constraints. Temu has now made available local inventory products such as office chairs, desks and fitness equipment to enrich the selection to meet the needs of South African consumers. Local warehouses reduced the cost of cross-border air transport and customs clearance, and Temu circumvented some of the tariff barriers through bulk imports and local storage. However, local warehousing may result in the loss of free distribution benefits for some commodities, and consumers will have to pay extra logistics costs to offset storage costs. In July 2024, the South African Revenue Authority (Sars) removed the duty-free preference for low-value imports (less than 500 rand) to 15 per cent VAT plus 20 per cent fixed tariffs, and was further adjusted to World Customs Organization standards in February 2025. This increased Temu ‘ s import costs, and local warehouses partially eased tax pressure through early clearance and local distribution.
Temu’s South African warehouse was seen as a test field for the expansion of African markets. Nigeria is the next potential target, with its young population and high mobile Internet penetration (over 200 million smartphone subscribers in 2024) and Temu ‘ s low-cost and social marketing strategies. In Nigeria, where logistics infrastructure is weak, Temu may replicate the South African model and improve distribution efficiency through local warehousing and third-party logistics cooperation. The African electricity market is expected to reach $30 billion by 2027, and Temu can quickly seize market shares by leveraging the supply chain advantages of PDF Holdings and the operational experience of 90 global markets.
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