Amazon refuses to let Shein and Temu encroach on its territory.
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According to CNBC, the e-commerce giant plans to launch a new section on its site full of discounted merchandise that will be shipped directly from China. The new storefront section, CNBC said, will offer unbranded items in the fashion, beauty and home categories, much like Shein and Temu’s inventory. Reportedly, the products will cost less than $20 for consumers.
While Amazon already has a slew of Chinese sellers, the new program will not mandate that those sellers store products in the U.S. for Fulfillment by Amazon ( FBA ) shipping, which benefited consumers because most products would still arrive inside a Prime delivery window.
Increasingly, consumers have become less concerned with shipping speed if the products are heavily discounted; according to CNBC, Amazon’s new direct-from- China model could see packages taking nine to 11 days to arrive.
CNBC noted that Amazon will begin to accept products, which can be tested in limited runs, in the fall and said the company hosted a closed-door meeting with Chinese sellers Tuesday sharing the opportunities and requirements associated with the program. However, it remains unclear when the new storefront will open for consumer shopping. Nonetheless, it will be well after Prime Day , which takes place in mid-July.
The purported new marketplace isn’t Amazon’s first foray into the discount space; earlier this year, it quietly launched Amazon Bazaar , a low-priced marketplace offering, in India.
The move likely signals Amazon has been feeling the pressure of Shein and Temu’s continued affinity with the American consumer.
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Salesforce estimates that Shein, Temu, AliExpress and other similar platforms could command 21 percent of Western spending for the upcoming holiday season . If Amazon’s new marketplace is up and running by then, it may have a chance to share in those profits, since Salesforce data shows that 58 percent of consumers choose platforms like Shein and Temu because of their ultra-low prices.
But Shein and Temu certainly haven’t stood idle in the U.S. consumer race; Temu announced earlier this year it had set up a U.S. marketplace that would enable orders to arrive on consumers’ doorsteps faster than ever before. Though data from Marketplace Pulse found that all of Temu’s U.S. marketplace sellers were actually Chinese entities, those sellers have warehouse storage in the U.S. to enable quicker shipping.
Shein, too, has set up a marketplace, differing from its traditional direct-to-consumer model and allowing brands and sellers to hawk their goods. It uses Flexport to fulfill those orders and is slated to open a West Coast supply chain office.
Salesforce’s data shows 43 percent of Western shoppers placed a Temu order within the past six months. That figure rises to about half among Gen Zers .
While an Amazon spokesperson did not directly confirm the addition of a discount marketplace, they said the e-commerce behemoth continues to look for ways to engage its customers.
“We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices and greater convenience,” the spokesperson said.
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