Amazon Plans Channel for Low-Cost China Goods to Fend Off Temu, Shein

By Tracy Qu and Sherry Qin

Amazon plans to launch a service focused on shipping cheap fashion wear, household goods and other products directly from warehouses in China as it faces growing competition from low-cost e-commerce platforms Temu and Shein.

In an invite-only meeting with Chinese merchants Wednesday, Amazon unveiled a plan to debut a new channel on its platform to sell unbranded fashion wear and household products from China, according to a slide presentation viewed by Dow Jones Newswires.

Amazon said it will ship the products directly from the world's second-largest economy to consumers in the U.S. within nine to 11 days of order placement, the slides showed. Until now, goods sold by Chinese merchants to Amazon's U.S. customers typically have been routed through warehouses in the U.S.

One slide depicting a mock-up of a digital storefront showed products including phone cases, mugs and facial massage tools.

An Amazon spokesperson contacted for comment said the company is "always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices and greater convenience." The spokesperson didn't elaborate on plans for the new channel.

Amazon's plan, first reported by The Information, marks a significant step by the U.S. e-commerce giant to safeguard its market leadership at home amid increasing competition from bargain app Temu, owned by China's PDD Holdings, and fast-fashion giant Shein.

Fast deliveries and easy returns have been a staple of Amazon's strategy, while Temu and Shein have drawn customers with low prices. Amazon executives have been weighing how to respond to the two competitors, observing that there is a market for bargain items that take longer to arrive, The Wall Street Journal has reported.

The two upstart e-commerce platforms, which ship products directly from China and store little inventory in the U.S., have expanded rapidly to threaten Amazon. Temu was listed as the Apple Store's most-downloaded free app in the U.S. on Thursday, while Shein ranked seventh, according to data provider Sensor Tower.

Write to Tracy Qu at tracy.qu@wsj.com and Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

June 27, 2024 07:07 ET (11:07 GMT)

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