as Chip’s demise, or is this just sour grapes?  Founded in 1985 in Adelaide, the private equity firm Alceon acquired a controlling stake in Cheap as Chips in 2016. In its final full financial year before entering administration, though, the business, which operates 47 stores across South Australia, Victoria and New South Wales, recorded a loss of $34.9 million. Administrators agreed to sell the firm to rival discount retailer Choice. When price competition turns structural There’s no doubt that Temu, Amazon and Shein have established effective business models by clouting the middle man. Australian bricks-and-mortar and hybrid models operate within fixed domestic cost structures, including wages, rent, inventory and compliance, which impose a natural price floor. However, global marketplace platforms can bypass these constraints by collapsing distance, time and comparison through factory-direct sourcing, algorithmic discovery and mobile-first impulse design.  That immediacy is visible within seconds. A Choice survey found that “Temu’s low prices become obvious after spending just seconds on its app or website.” Last year, for example, the consumer group identified a men’s belt selling for less than $6.89, compared with at least $20 elsewhere, and a suitcase priced at $43.79, against a market norm closer to $100. The experience is framed by perpetual urgency. Temu’s pages are saturated with claims of constant sales, discounts of more than 90 per cent and the promise of free shipping, a design that turns low prices into a continuous prompt to act. An uneven playing field Wesfarmers chief executive Rob Scott has been blunt about what he sees as an uneven playing field confronting Australian retailers. As the head of a group spanning Kmart, Target, Bunnings and Officeworks, Scott argues that competition only works when the rules keep pace with reality. “Competition benefits businesses and customers, but when regulation and taxes unfairly disadvantage some businesses, it leads to higher prices and puts Australian jobs at risk,” he told The Australian. At issue, Scott says, is a regulatory framework designed for a pre-ecommerce era.  “Many tax and regulatory settings in Australia that apply to retailers predate e-commerce,” he said, allowing large foreign platforms to gain an advantage by structuring operations offshore, while local retailers shoulder corporate, payroll and property taxes. Earlier this year, Scott partly blamed the collapse of Wesfarmers’ online marketplace Catch and the loss of hundreds of jobs on overseas e-commerce giants, admitting that the rise of Amazon and Temu kept him up at night. “Retailers with large store networks and Australian headquarters pay additional taxes and face trading restrictions,” he said. “As a result, some large foreign e-commerce retailers benefit from Australia’s current tax and regulatory settings, putting local retailers at a disadvantage and transferring value overseas.” The solution, Scott argues, is overdue reform. “We need a level playing field that reflects the realities of retail in 2025, not 1985.” Scale without scrutiny Research from Australia Post, meanwhile, shows the pace of Temu’s rise has been extraordinary. Since entering Australia in March 2023, the platform has grown thirteenfold and now accounts for around 5 per cent of all e-commerce spending. Shein, meanwhile, has recorded roughly 20 per cent annual growth over the past two years, securing as much as 2 per cent of Australia’s online retail spend. Temu’s visibility has followed its scale. It was the most downloaded free app in 2024 and remains among the top-ranked apps in Apple’s App StoreBack in October the CEO of Australia Post, Paul Graham, alluded to Amazon, Shein and Temu as a “drug,” making a blunt appeal to Australians to “support local retailers”. Graham sets out a pointed argument about the concerns ultra cheap online shopping is having on Australian businesses long term.  New questions: price, safety and accountability The scrutiny is no longer confined to pricing. Last month, 162 products were tested by International Consumer Research and Testing across Germany, France, Denmark and Belgium, spanning three categories: toys and products for children under three, USB chargers and necklaces.The results were stark. Sixty-five per cent of products purchased from Temu and 73 per cent from Shein were found to be non-compliant with EU safety standards. In the children’s category, the failure rate was near total: all 27 toys tested from Shein failed, as did 26 of the 27 purchased from Temu. Those findings landed alongside broader political backlash. In Paris, Shein’s first permanent store opening last year was overshadowed by controversy after French authorities moved to suspend the platform following the discovery of prohibited products on its site.Together, these developments have pushed regulators into a more assertive phase.The Australian Competition and Consumer Commission (ACCC) has signalled that issues with ultra-cheap online marketplaces extend beyond pricing alone, noting that digital platforms carry significant consumer and competition harms as experienced in the market. “There continues to be significant risk of consumer and competition harms on digital platforms,” ACCC Chair Gina Cass-Gottlieb said last year, identifying unfair trading practices and other systemic concerns in online retail environments. These interventions address fairness at the margins; however, they do not directly recalibrate expectations. So are Temu and Amazon really responsible? Temu, Shein and Amazon did not cause Cheap as Chips’ collapse on their own. But they helped expose the limits of a domestic discount model built for a different era. What platforms have done, with speed, scale and psychological precision, is reset the outer boundary of price expectation. For retailers operating inside Australia’s wage, tax and compliance framework, that reset has consequences. Some will adapt. Others will not. Cheap as Chips sits at that fault line. Not a victim of competition in principle, but of a system where global price signals now travel faster than regulation, and where the meaning of “cheap” has been fundamentally rewritten.  The Temu effect was once about price. It is now about expectation.