Amazon is shaking up the competition with Chinese low-cost rivals Shein and Temu. Recently, the e-commerce giant introduced Amazon Haul, an online storefront offering products priced at $20 or less, with most items under $10. While experts are optimistic about Amazon’s new venture, the fierce price war in the low-end e-commerce sector poses challenges for its success.
These developments led to a drop in PDD Holdings’ share price by over 10% and a decrease of more than 2% in Amazon’s shares.
The market’s reaction raises questions about the viability of Amazon’s Haul launch.
Despite this, retail expert Jeanel Alvarado from The RETAILBOSS believes that Amazon Haul can effectively compete with Shein and Temu by targeting tech-savvy, budget-conscious shoppers who prefer mobile shopping.
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“Amazon’s advantage over Shein and Temu lies in two key areas: fast shipping and scalability,” she shared with The Epoch Times.
“While Shein and Temu have longer delivery times, Amazon can fulfill orders within days. Additionally, Amazon’s global network of sellers, fulfillment centers, and AI-driven insights give it a competitive edge in the market,” she added.
Greg Zakowicz, an e-commerce expert at Omnisend, also sees promise in Amazon’s new discount platform, emphasizing its potential to build trust among consumers.
“Our survey revealed that only 7% of respondents trust Temu due to issues like slow shipping and product quality. Amazon can capitalize on this by leveraging its strong reputation and vast distribution network to challenge Temu and Shein, especially amidst regulatory challenges faced by Chinese platforms,” Zakowicz stated.
However, Zakowicz highlighted the challenge for Amazon in maintaining quality and transparency while offering competitive prices, a struggle already faced by Temu and Shein.
“Our data shows that 16% of Americans view Temu as Amazon’s primary competitor, indicating a shift in the market landscape. With Walmart also entering the market with Chinese vendors, the competition for affordable goods is set to intensify,” he remarked.
Alvarado drew parallels between Amazon’s Haul strategy and Facebook’s Threads, noting the potential for Amazon to dominate the market by catering to customer needs effectively.
Isaac Gross from IG PPC commended Amazon’s strategic move against Shein and Temu but cautioned that success is not guaranteed.
“Amazon’s strong brand and logistics network position it well in the market. However, maintaining a balance between low prices and trendy offerings like its competitors will be crucial,” he pointed out.
Jacob Edwards-Bytom from UltraLabs suggested that Amazon’s new venture should focus on curated experiences to differentiate itself and attract customers.
“While Amazon is known for its convenience and range of products, it may need to enhance its bargain shops’ visibility and offer a personalized shopping experience to regain market share,” he advised.
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