Shein, Temu Affecting Australian Small Businesses: Report

(small.news) — Small business owners in Australia are struggling and, according to The Australian, they are blaming online stores like SHEIN and Temu.

The owner of Janinas Costumes, Ezra Mercury, told The Australian that it’s almost impossible to compete with these companies. He claimed that sales during Halloween were down 48% this year when compared to last year. Mercury said that, if the government doesn’t get involved, many small businesses will fail.

The chief executive of Wesfarmers, Rob Scott, told The Australian that these small businesses are being forced to compete on a playing field that isn’t close to even. He explained, “Competition benefits business and customers, but when regulation and taxes unfairly disadvantage some businesses, it leads to higher prices and puts Australian jobs at risk.”

Impossible To Compete

Mercury opened his shop with his wife six years ago. He told The Australian that now, it isn’t possible to compete with these companies. “It’s just absolutely saddening. It’s absolutely destroying small bricks-and-mortar businesses and family businesses all across Australia… How can the Australian government keep this open playing field fair? What sort of taxes do SHEIN and Temu actually pay into the Australian coffers?”

He went on to explain that these companies have been impacting his small business’ sales since around 2022, and he’s most likely lost around $6,000 in sales. Now, he says that number is closer to $15,000 per year and is still increasing.

Foot Traffic Affected

The founder of CM ink, Catherine Michael, said that the popularity of Temu, SHEIN, and Amazon has also affected foot traffic in Australia. Now, there aren’t as many customers entering bricks-and-mortar stores. She explained, “That’s a concern because there’s just less people then that are going into some of the most expensive rents in the country. Less customers equals less turnover dollars.”

Michael also believes that government intervention is needed, as well as a change in the habits of customers. Without these small businesses, Michael claims that shopping centers will be extremely empty. “The effect will also come back and bite in superannuation funds and commercial property valuations. If the Australian government wants to rely on superannuation funds to fund the future and generations of senior living, there needs to be some support for retail upfront.”

Australian Small Business Forced To Close

Robin Worship, who owned the costume shop Sunshine Coast for 16 years, was recently forced to close his business. Sunshine Coast was no longer profitable because of the decline in sales on top of rent prices that kept rising.

He told The Australian, “Even some of our suppliers that we used to get a lot of costumes from closed down. They closed their doors because they couldn’t sustain the losses.”

This could, unfortunately, be the story of many small businesses around the country if changes aren’t made quickly.