🛒 New Discount Section
Amazon is launching a new discount section to rival Temu and Shein. The new section will offer ultra-low-cost goods shipped directly from China. In a recent meeting with top Chinese sellers, Amazon detailed its plans to deliver items in 9 to 11 days. This new offering will target US consumers willing to wait longer than Amazon's typical one- or two-day delivery for a bargain.
✈️ Shipping Strategy
Amazon's new section will include goods under $20, weighing less than a pound, and exclude edibles and liquids. The items will be airshipped from warehouses in China to the US. This move follows the business models of Temu and Shein, which have grown rapidly by advertising low-priced items and utilizing the de minimis rule to avoid tariffs. The rule allows packages under $800 to enter the US tariff-free.
📦 Market Competition
Temu and Shein, who benefit from the de minimis loophole, have faced criticism and legislative challenges in the US. However, their success has prompted Amazon to adopt similar tactics. Amazon's market value recently surpassed $2 trillion. The company aims to offer greater selection, lower prices, and more convenience by partnering with Chinese sellers and utilizing its logistical capabilities.
📅 Launch Timeline
Amazon will start signing up sellers this summer and plans to roll out the new discount section in the autumn. This move poses a threat to Shein's plans for an IPO in London. As Amazon prepares to introduce this new section, it emphasizes its commitment to providing customers with more choices at lower prices, directly competing with established discount e-commerce players.
Will Amazon's new discount section outshine Temu and Shein?
