Amazon Plans to Launch a Discount Section on its Website to Fend off Temu and Shein

CNBC has learned that Amazon is planning to launch a new section on its website dedicated to affordable fashion and lifestyle items that will allow Chinese sellers to ship directly to US customers.

Amazon fights back against Temu and Shein
The move would be an attempt to fend off growing competition from e-commerce newcomers Temu and Shein. The two companies have expanded their presence in the US in recent years, luring customers with their rock-bottom prices on clothing, electronics, household goods and other products.

Mail order company seeks Chinese sellers
China-based retailers have made up a significant part of the Amazon marketplace for many years. The company is making renewed efforts to attract sellers there while facing growing competition. According to Amazon, the number of items sold by Chinese sellers on its platform (2023) has increased by more than 20% year-on-year, while the number of Chinese sellers with revenues of more than $10 million has increased by 30%, the news outlet reported.

Inexpensive items are offered in the new shop window - many are said to cost less than $20
According to a presentation for Amazon sellers, Amazon's "storefront" will offer a range of unbranded items, many of which will cost less than $20, CNBC commented. The mail-order retailer would ship the products directly from China to the U.S., with the goal of delivering them to customers within nine to 11 days, according to an Amazon presentation viewed by CNBC. In the past, Amazon sellers in China have relied on the company's fulfillment services to send goods to warehouses in the U.S. before shipping them to customers. Amazon has advertised cost savings for Amazon sellers in China, commenting that merchants could test new items by producing small batches. Shein also uses a similar model, known as on-demand production, where a limited amount of goods are produced and more are made as demand increases, the report said.

Amazon spokeswoman Maria Boschetti told CNBC that the mail-order retailer is constantly looking for new ways to work with distribution partners to offer customers more choice, lower prices and greater convenience. It remains unclear when the "storefront" will open, but it was noted during the presentation that it is expected to begin accepting products in the fall.

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