NZ retailers call for levy on Temu and Shein to level the playing field

New Zealand retailers are pushing for a levy on overseas online shopping platforms such as Temu and Shein, arguing that the unchecked growth of ultra-cheap offshore e-commerce is hollowing out local businesses and costing New Zealand jobs.

Retail NZ, the industry body representing the sector, has called on the government to consider a fee on purchases from overseas platforms that currently bear none of the compliance costs faced by domestic operators. The proposal has drawn support from some quarters and caution from others, but the underlying data paints a clear picture of a sector under strain.

The number of retail enterprises in New Zealand fell from 29,244 in February 2023 to 28,554 in February 2026 — a loss of roughly 690 businesses over three years. The pain has been sharpest in clothing. Apparel spending has grown at half the rate of total consumer spending over the past decade, and children’s and babywear shops are operating at activity levels last seen around 2016.

Retail NZ chief executive Carolyn Young says the disparity in costs between domestic and offshore operators is the crux of the issue. “Every extra dollar spent offshore is a dollar lost locally, doesn’t create jobs here,” she told RNZ. Local businesses face compliance costs — GST collection, employment law, health and safety requirements, resource consent, and tenancy obligations — that overseas platforms operating through postal and courier networks largely sidestep.

The model used by platforms like Temu and Shein is built around extraordinary price points made possible by supply chains rooted in low-cost manufacturing, minimal regulatory overhead in their home markets, and the ability to ship directly to consumers without establishing a local footprint. For a New Zealand retailer paying Auckland commercial rents, meeting the Holidays Act, and filing GST returns quarterly, competing on price alone is increasingly impossible.

ANZ chief economist Sharon Zollner described the past several years as “brutal” for clothing retail. She noted that consumers, squeezed by the cost of living, may have shifted more purchases to offshore platforms precisely because those platforms offer cheaper prices — cheaper in part because they are not bearing the same costs as local competitors.

Westpac senior economist Satish Ranchhod agreed the numbers were striking. “Apparel has been tracking flat for quite an extended period,” he said, with offshore competition intensifying pressure across the clothing sector.

The proposal has an international precedent. France is implementing an environmental fee on ultra-fast fashion brands that will rise to 10 euros per item by 2030. The French model targets the environmental cost of disposable fashion — the carbon footprint of air-freighted parcels and the waste generated by goods designed to be worn once and discarded.

Green Party co-leader Chloe Swarbrick acknowledged the problem was real but urged caution about how any levy might be structured. She said France’s experience showed that such mechanisms could be “unwieldy” to administer and that the details would matter enormously.

That caution is well-founded. Any New Zealand version of a levy would need to avoid burdening consumers who rely on affordable overseas platforms to manage household budgets already under pressure. The challenge is targeting the levy at the competitive distortion — the compliance costs avoided by offshore operators — rather than simply taxing international trade as such.

There is also a question of enforcement. New Zealand has successfully implemented a GST obligation on overseas digital services, requiring large platforms to register for and collect GST on sales to New Zealand consumers. A similar framework applied to physical goods from offshore retailers is technically feasible but would require platforms to comply voluntarily or face enforcement through border controls — a complex undertaking given the volume of parcels handled by customs and courier companies.

The broader debate sits within a global conversation about how domestic retail can survive in an era of frictionless international e-commerce. The traditional bricks-and-mortar model — paying rent, employing staff, holding inventory — carries costs that online-only players, and especially offshore online-only players, do not. If those cost differences are not addressed through policy, the natural endpoint is a retail landscape increasingly dominated by overseas platforms with no local employment footprint and no local tax base.

New Zealand’s retail sector employs tens of thousands of people and underpins many town centres and suburban shopping strips. Whether a Temu tax is the right tool is debatable, but the problem Retail NZ is pointing to — an uneven competitive field that favours offshore over onshore — is difficult to dismiss. The government has not committed to any policy response, but the pressure from the retail sector is likely to grow as more store closures accumulate.

What do you think — should New Zealand introduce a levy on overseas online shopping platforms to level the playing field for local retailers? Share your thoughts in the comments below.