To face growing competition from Chinese e-commerce platforms like Shein et Ago, Amazon could offer a selection of products at discounted prices, directly shipped from China.
Faced with Shein and Temu, Amazon does not intend to give in
Amazon held a closed-door event for sellers in China. The company took the opportunity to outline its plans to launch a section of its site featuring even cheaper items. The objective is clear: respond to the threat posed by Chinese stores Shein and Temu which are making inroads in several countries, including the United States.
Read: Temu will now be monitored very closely by Brussels
From clothing to electronics to home goods, Chinese giants Temu and Shein have slashed prices on some products sold online. Their secret: small-batch production that then adapts to demand, and shipping directly from China, which can take several weeks.
When Amazon goes dropshipping
To cope, Amazon will introduce a range of unbranded products, many of which should cost less than $20. According to our colleagues at CNBC, dumbbells, phone cases and even face masks were presented, among other items. To reduce costs, Amazon would use the “dropshipping” or “direct delivery” method.
Concretely, the product ordered on Amazon would be sent directly by the manufacturer from China. The product could be delivered to US customers within 9-11 days. A method sometimes criticized, but already used by certain Chinese sellers on Amazon, which the e-commerce giant could this time push.
Read: Shein, under reinforced EU control, has four months to show its credentials
Until now, Amazon encouraged sellers to use its “Fulfilled by Amazon” service, which consists of sending products to the warehouses of the world number 1 e-commerce company. The latter was then responsible for sending the products in record time, against fees charged to the sellers of the products.
Sending products directly from China would allow manufacturers and sellers to save money, and thus offer products at more competitive prices. All would not be lost for Amazon which obviously takes commissions on sales made on its platform.
Flirting with Chinese vendors
To avoid giving up too much ground to Shein and Temu, Amazon is doing everything it can to please Chinese sellers. After reducing the fees charged to merchants selling clothing for less than $20, Amazon also announced the creation of an “innovation center” in Shenzhen, one of the main technology and manufacturing centers in China. In 2023, items sold on Amazon by Chinese sellers increased by 20% compared to 2022.
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