Amazon Plans To Launch Bargain Store To Compete With Temu And Shein

Amazon is preparing to introduce a new section of its website devoted to inexpensive fashion and leisure products, enabling Chinese sellers to ship straight to customers in the United States.

TakeAway Points:

  • Amazon unveiled plans for a new low-cost storefront in China that will sell inexpensive clothing, household goods, and other products at a closed-door event for merchants.
  • The storefront would face off against Temu and Shein, two up-and-coming Chinese e-commerce websites that are becoming more and more well-known in the US.
  • Although the presentation indicates that it will begin accepting products this autumn, it is unclear when Amazon plans to launch the site.

Amazon’s Discount Stores

Amazon intends to open a new area of its website devoted to inexpensive fashion and leisure products, enabling Chinese sellers to ship straight to customers in the United States.

According to the report, the storefront, announced at an invite-only conference for Chinese sellers on Wednesday, would mark Amazon’s most aggressive attempt yet to fend off growing competition from e-commerce upstarts Temu and Shein, which both have ties to China, the world’s second-largest economy.

Meanwhile, Temu and Shein have expanded their presence in the U.S. in recent years, luring an increasing share of American shoppers with their rock-bottom prices on clothing, electronics, home goods, and other products.

Storefront Features

Amazon’s storefront will feature a range of unbranded items, many priced under $20, according to a presentation to Amazon sellers. A mock-up of the storefront showed a gua sha facial massaging tool, arm weights, and phone cases, among other items for sale.

Amazon will ship the products directly from China to the U.S., with the goal of delivering them to shoppers within nine to 11 days, the presentation shows. In the past, Amazon sellers in China have relied on the company’s fulfilment services, called Fulfilment by Amazon, to send goods to warehouses in the U.S. before they are dispatched to customers.

Impact of this movement to the Company

The company pitched the arrangement as a cost savings for Amazon sellers in China, and said merchants would be able to test new items through small-batch production. Shein uses a similar model, referred to as on-demand manufacturing, producing a limited quantity of goods and manufacturing more as demand increases.

“We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices, and greater convenience.” Amazon spokesperson Maria Boschetti said in a statement.

Also, the report stated that China-based merchants have made up a sizable contingent of Amazon’s marketplace for many years, but the company is making a renewed push to court sellers there as it faces growing competition. In December, Amazon announced a new “innovation center” in Shenzhen, a popular technology and manufacturing hub, and it also slashed the fees it charges merchants selling clothing priced below $20.

Amazon previously said that in 2023, the number of items sold by Chinese sellers on its site grew more than 20% year over year, while the number of Chinese merchants with sales exceeding $10 million increased by 30%.

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