The News
Amazon on Wednesday launched a new e-commerce storefront to compete with Temu, the Chinese platform known for its super-cheap goods. Haul, which was only available on Amazon’s app in a beta version, says it offers products at “crazy low” rates, including $2 phone cases, and a pillow set for $5.
The items are cheaper because they are imported directly from China, but they take longer to arrive than other goods sold on Amazon.
SIGNALS
Effort reflects Amazon’s desire to keep up with Temu
Amazon has worked for months on developing an answer to TikTok Shop, Temu, and Shein, which have boomed in popularity through their eye-popping deals on clothes, trinkets, and home goods. The Chinese platforms are able to keep prices low by shipping directly from China and taking advantage of a US import loophole that doesn’t impose tariffs on shipments under $800. “The only way Amazon could match prices was to replicate the supply-chain advantage,” a market researcher said this year. Amazon has also increased sales of low-cost, everyday essentials like toothpaste and laundry detergent, while Temu has stepped up its game against the US retail giant by courting more sellers that ship from warehouses in the US, rather than China, The Information reported.
Trump 2.0 could threaten low-cost import strategy
Donald Trump’s return to the White House could drive up costs for the cross-border e-commerce platforms, including Amazon Haul, through tariffs hikes that he has pitched for all Chinese imports. “The proposed tariffs represent a fundamental challenge” for platforms like Shein and Temu, Tech in Asia wrote. The Biden administration recently moved to tighten the tariff-free import loophole used by the Chinese platforms, and called on Congress to take further action. Such moves could reverse a “paradigm shift” in retail, which saw US-based companies struggle to keep up with Chinese e-commerce competitors, The New York Times wrote.