Australia is facing mounting pressure to rein in the operations of fast-growing Chinese online retailers Shein and Temu, amid increasing concerns about product safety, tax loopholes, and the detrimental impact on local businesses. The issue comes as governments around the world, particularly the United States, begin to implement stricter trade measures targeting China’s e-commerce boom.
Retailers, consumer groups, and economic experts are calling on the federal government to reassess current import regulations and introduce stronger safeguards to ensure fair competition and public safety. The calls follow reports that the two online platforms have rapidly expanded their reach across the Australian market, now generating an estimated $3 billion in annual sales combined.
A recent investigation by consumer watchdog CHOICE revealed alarming safety concerns related to products sold on Temu. Testing of 15 toys purchased through the platform showed that all failed to meet Australian safety standards, particularly due to insecure battery compartments that pose serious risks to children. One product—a light-up tutu skirt—was identified as particularly hazardous.
Temu has since opened discussions with the Australian Competition and Consumer Commission (ACCC) and expressed willingness to sign a voluntary product safety pledge. However, critics argue that voluntary agreements are insufficient and that stronger regulatory enforcement is needed.
Industry leaders, including retail magnate Gerry Harvey, have voiced concerns that Shein and Temu are exploiting Australia’s import tax rules, particularly the de minimis threshold which exempts goods under $1,000 from GST and duties. This allows overseas sellers to undercut local retailers, who must comply with stringent tax and employment obligations.
“These companies are damaging the local economy. They don’t pay tax, don’t hire Australians, and don’t follow the rules that our businesses must,” Harvey said, calling for a federal inquiry into the operations of both platforms.
Australia is not alone in grappling with the rise of ultra-cheap Chinese e-commerce. Earlier this month, the United States announced new tariffs targeting Temu and Shein as part of a broader strategy to reduce economic dependence on China and protect domestic industries.
Experts warn that Australia risks falling behind unless it adopts a similar stance. “There’s a clear need to modernize our trade and consumer protection policies. The current framework was not designed to handle this new era of cross-border digital retail,” said Dr. Emily Cartwright, senior analyst at the Australian Trade Policy Institute.
The federal government has yet to announce any specific measures but has acknowledged the growing concerns. A spokesperson for the Department of the Treasury confirmed that a review of digital trade and import practices is underway, with a report expected later this year.
While consumers have flocked to Shein and Temu for their vast product ranges and low prices, the growing backlash signals a broader debate about the true cost of fast fashion and cheap goods. As Australia considers its next steps, policymakers will need to strike a delicate balance between consumer access, public safety, and the long-term health of the domestic economy.
