Source – Medial
Amazon is set to unveil a new section on its website dedicated to affordable fashion and lifestyle items, directly connecting Chinese sellers with U.S. consumers. This move represents Amazon’s most assertive strategy to date in countering the growing competition from Chinese e-commerce platforms Temu and Shein.
Competing with Temu and Shein
Temu and Shein have successfully penetrated the U.S. market in recent years, attracting a substantial number of American consumers with their extremely low prices on clothing, electronics, home goods, and other products. In response, Amazon’s new storefront aims to feature a variety of unbranded items, mostly priced under $20. According to a presentation viewed by CNBC, the Amazon Low-Priced Fashion storefront will include items such as gua sha facial tools, arm weights, and phone cases.
Direct Shipping from China
Amazon plans to ship products directly from China to the U.S., targeting a delivery timeframe of nine to eleven days. Previously, Chinese sellers on Amazon relied on the company’s Fulfillment by Amazon (FBA) services to send goods to U.S. warehouses before dispatching them to customers. This new approach is being marketed as a cost-saving measure for Chinese sellers, allowing them to experiment with new items through small-batch production. This model, known as on-demand manufacturing, is similar to Shein’s strategy of producing limited quantities of goods and scaling up based on demand.
Amazon Tries to Fight Off Discount Online Retail Competitors
Strategic Initiatives and Seller Benefits
In a statement to CNBC, Amazon spokesperson Maria Boschetti said, “We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices, and greater convenience.” While Boschetti declined to provide additional details on the timeline, the presentation indicates that Amazon will begin accepting products for the new section this fall.
Chinese merchants have been a significant part of Amazon’s marketplace for many years. However, with increasing competition, Amazon is intensifying efforts to attract sellers from China. In December, the company announced the opening of a new “innovation center” in Shenzhen, a major technology and manufacturing hub, and reduced fees for merchants selling clothing items priced under $20.
Growing Presence of Chinese Sellers
Amazon reported a significant increase in activity from Chinese sellers in 2023, with the number of items sold by these sellers growing by more than 20% year-over-year. Additionally, the number of Chinese merchants achieving sales above $10 million increased by 30%. This renewed focus on Chinese sellers, combined with the launch of Amazon Low-Priced Fashion section, underscores Amazon’s strategic efforts to strengthen its market position amidst rising competition from other e-commerce giants.
As Amazon continues to innovate and expand its offerings, the new Amazon Low-Priced Fashion storefront is expected to provide U.S. consumers with a wider array of affordable products, while also offering Chinese sellers a more streamlined and cost-effective way to reach the American market.
