The US e-commerce giant told Chinese merchants in an invite-only meeting on Wednesday that this new online budget marketplace will feature non-branded fashion items, household goods and daily necessities, which will ship directly to consumers from warehouses on the mainland in nine to 11 days.
That plan, first reported by online tech publication The Information, has already made a splash within China’s cross-border e-commerce community, where heated discussions centred around joining this marketplace and related Amazon policies. This programme, however, is only open to select sellers.
“The initial feedback from Chinese merchants has been quite positive even though Amazon has yet to officially launch the new programme,” said Wang Xin, executive chairwoman of the Shenzhen Cross-Border E-Commerce Association.
Select mainland Chinese merchants have been invited by Amazon.com to joint its new discount-shopping marketplace. Photo: Reuters
Amazon’s new discount marketplace resembles the budget e-commerce model of platforms like Temu, which work closely with Chinese suppliers in marketing and shipping dirt-cheap goods directly to global consumers.
Merchants under Amazon’s new programme can set product prices by themselves, which deviates from the Temu model, according to Wang. She said this is likely to appeal to mainland cross-border merchants and exporters – especially those who have worked with Temu, Shein and TikTok Shop – with the manufacturing capabilities, cash flow, talent and supply chain to make a difference for Amazon.
The US company’s planned foray into the discount-shopping market segment shows a renewed effort to broaden its “Made in China, sold on Amazon” community, as many mainland suppliers struggle to boost their profits amid fierce competition between discount-shopping platforms.
“By leaving pricing in the hands of sellers, Amazon has offered a crucial way for them to maintain profitability,” Wang said.
Amazon.com’s discount-shopping initiative is expected to attract suppliers who have worked with rival platforms Temu, Shein and TikTok Shop. Photo: Shutterstock
“We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices and greater convenience,” Amazon said in a statement in response to an inquiry about the new initiative.
Temu topped the shopping app download charts across 125 markets in 2023 including the US, where Shein ranked second, according to a report by Data.ai.
Guangzhou-based garments supplier Kenny Li, who works with Shein and Temu, said he has been closely following the news about Amazon’s plan and is keen to join when he has the chance.
The new online budget marketplace planned by Amazon.com will feature non-branded fashion items, household goods and daily necessities shipped directly to consumers overseas from the warehouses of suppliers in mainland China. Photo: Shutterstock
“It would be a good opportunity for us to expand our sales channel and lower the risks,” said Li, whose factory makes T-shirts and jeans that only sell for a few dollars.
Li disclosed that he has been cutting back supplies to Temu after being penalised for goods returned by consumers. “It’s hurting our profit, so I’d rather produce less than to bear the costs of the returns,” he said.
While Chinese sellers are eager to jump on this new Amazon bandwagon, it will not be an easy task for the US firm to win consumers over from Temu and Shein in the discount-shopping segment, said Zhang Yi, founder and chief analyst at market consultancy iiMedia.
“Amazon has set its sights on China as an enormous and highly efficient manufacturing hub to provide a variety of cheap goods, but it remains to be seen whether the company can make a smooth shift from its existing model to a low-cost one,” Zhang said.
