Amazon to launch new store competing with Temu, offering low-priced items directly from China

Amazon is set to launch a new online store aimed at competing with retail brand Temu by offering low-priced items shipped directly from sellers in China. The announcement was made to a private conference of Chinese sellers earlier this week, according to CNBC.

The new section on Amazon’s website will feature unbranded items at significantly reduced costs, similar to Temu’s model. These items will be shipped directly from China to the U.S., with an estimated delivery time of nine to 11 days. This approach represents a shift from Amazon’s existing logistics model, where products are shipped to U.S. warehouses before being delivered to customers.

In July 2023, Amazon reinforced its traditional model by announcing plans to “regionalise” its U.S. delivery network. This involves using machine learning to predict where customers will want specific items and storing those products at fulfillment centers in those areas to expedite delivery times.

Amazon has previously criticised Temu’s ultra-low prices. In May 2023, Reuters reported that Amazon excluded Temu from its price-searching algorithm, which compares prices on Amazon’s platform with those of competitors to ensure competitive rates. At the time, Amazon stated that Temu did not meet its fair pricing policy requirements.

The exact launch date for Amazon’s new store has not been disclosed, but the presentation to sellers suggests that the company will begin accepting products by fall 2024. This new venture marks a significant strategic move for Amazon as it seeks to capture market share in the competitive landscape of low-priced, direct-from-China retail.