With Christmas and New Year approaching, the e-commerce battle in Europe and the U.S. has entered a “fever pitch.” According to the latest foreign media reports, U.S. e-commerce giant Amazon is adjusting its business strategies to tackle increasingly fierce competition from Chinese e-commerce platforms in the fight for market share.
Violators May Be Removed from Amazon’s “Featured Offer” Program
“This American e-commerce giant is facing a tough battle to protect its domestic market against competitors like Temu, fast-fashion site Shein, and ByteDance’s TikTok Shop,” Hong Kong’s South China Morning Post reported on the 24th. Several sellers revealed that the U.S. retailer has begun tracking product prices on Temu and has requested some Chinese cross-border merchants to stop selling goods at lower prices on competing platforms.
Sellers say Amazon’s local offices in the U.S. recently informed managers of popular Chinese brands that they must not sell identical products at lower prices on Temu. One furniture seller operating on both platforms reported that sellers found charging higher prices on Amazon risk being removed from its “Featured Offer” program.
In response, an Amazon spokesperson stated, “Sellers determine their sales strategies and set their own product prices on Amazon. We do not require them to price products a certain way.”
Last week, well-known power bank and charger brand Anker suddenly removed more than 40 products from Temu. Rumors began circulating that Amazon was pressuring sellers to prioritize its platform. A cross-border e-commerce insider revealed, “Several brands previously opened stores on Temu, but after receiving warning letters two nights ago, they removed products overnight. This pressure hasn’t yet reached small sellers, but the top 20 brands have almost all received warnings.” On Monday, Anker’s U.S. store on Temu displayed no products, though its German store continued to list 18 items.
Reuters reports that Amazon has already excluded Temu from its price comparison system.
Copying the Path of Chinese E-commerce
Over the past few years, as fast-fashion brand Shein and online marketplace Temu have gained traction in the U.S., e-commerce has shifted. According to The Verge, American consumers are increasingly willing to wait weeks for packages shipped from China in exchange for lower prices and broader product variety. Chinese e-commerce platforms have gained popularity, creating pressure for domestic giants like Amazon. Data from Sensor Tower indicates that as of August 2024, Temu’s global user base has reached 91% of Amazon’s and is expected to surpass the 30-year-old e-commerce leader within the year.
Although Amazon once criticized low-price competition, it now appears to be adopting similar tactics to keep pace with Temu’s growing popularity. Ahead of Black Friday, Amazon quietly added a new low-price section called “Haul” to its mobile app. Haul features ultra-low-priced items shipped directly from China, such as $9.98 sneakers, $5.99 kitchenware, and $2.99 phone cases.
The Verge remarked that Haul’s interface “looks much like Temu, Shein, and AliExpress.” Business Insider called it a “subpar version of Temu.” The outlet criticized Haul’s product selection and pricing, noting that some items are even more expensive than on Amazon’s main site. Unlike Temu, which specializes in quirky, unique, and low-cost products, Haul has yet to replicate this variety.
A November 2024 Salesforce survey found that 21% of U.S. respondents view emerging platforms like Temu as more enjoyable than traditional shopping. Half of those surveyed cited low prices, while 47% highlighted the “treasure hunt” experience.
However, lower prices come at the cost of slower shipping. Unlike Amazon Prime’s one- to two-day delivery, Haul orders take one to two weeks to arrive. While Amazon has long partnered with Chinese sellers to stock items in its U.S. warehouses, reducing delivery times, this strategy increases costs—costs often passed on to consumers.
“Walking on Two Legs“
Despite emulating Temu’s business model, Haul currently uses an invite-only system for sellers, meaning not all merchants can participate. This limitation affects product diversity and prevents Haul from competing effectively on price.
“Amazon appears to be walking on two legs,” commented an industry insider. “It’s focusing on both premium brands and low-cost goods.” By maintaining traffic on its main platform while exploring the potential of low-cost retail, Amazon aims to benefit from both worlds.
Forrester retail analyst Sucharita Kodali told the BBC that Haul is not without risks. Evidence suggests that consumers are “increasingly fed up with poor-quality goods and slow shipping.” Kodali predicted, “If Haul fails to meet shoppers’ needs and doesn’t turn a profit, it won’t last long.”
Although Amazon remains the top e-commerce platform in the U.S., the fierce competition among platforms has inevitably led to the fragmentation of orders and traffic. Haul, while a proactive move to counter this trend, still faces an uncertain future in delivering meaningful growth for Amazon.
Leave a comment