Amazon launches “low-price store” to prepare for cross-border e-commerce

Blue Whale News, June 27 (Reporter Qin Quan) A new news from Amazon quickly attracted attention among Chinese cross-border e-commerce merchants.

On June 26, Amazon held a closed-door meeting in Shenzhen to introduce the latest actions of the platform to Chinese merchants. It stated that it would launch a “low-price store” project. A circulated photo of the scene introduced: A store specially designed for The store provides customers with white-label low-priced fashion, home and daily necessities categories, which are shipped directly from China by Amazon and reach consumers within 9-11 days.
Judging from the white-label low-price and investment categories, Amazon has finally begun to spend some energy and officially launched a low-price war with Chinese cross-border e-commerce companies such as Temu and SHEIN.
Some Chinese sellers showed great enthusiasm for Amazon’s “low-price store”. The news quickly spread among cross-border merchants that day, and related merchant discussion groups were established. A discussion group had an influx of more than 200 users within half an hour on the morning of the 27th. Merchants had heated discussions in the group and were inquiring about the application entrance.
A seller told Blue Whale News that Amazon’s business is still in the “internal invitation” stage, and “the platform has not yet opened the application entrance.” Some merchants said, “It will definitely be soon. It is said that registration will be open in the summer.” ”, they are all ready to try it next.
Judging from industry news, Amazon’s “low-price store” is similar to Temu’s full hosting at the pixel level: the low-price store mainly sells unbranded goods; the first batch of investment and product selection categories are only open to fashion, home, and lifestyle categories. It is a hot-selling category among Chinese cross-border e-commerce companies such as Temu and SHEIN. It focuses on low-priced products and consumers have a “refund only” option.
Blue Whale News learned that the biggest difference between Amazon’s “low-price store” and Temu’s fully managed model is that registered sellers have the right to determine the final sales price of the product, while Temu’s fully managed model has the final price verification by the platform. This is also understood by Chinese merchants as “low-price store” sellers will bear their own warehousing costs.
China’s “Four Cross-border E-commerce Tigers”, especially Temu and SHEIN, have achieved huge growth in the global market in recent years. “LatePost” previously reported that Temu is expected to achieve a GMV of US$14 billion in 2023; another report stated that SHEIN’s annual sales exceeded US$45 billion last year, and the US market accounted for 60% of Temu’s and SHEIN’s global shares respectively. one third. In addition, Alibaba’s cross-border e-commerce platform AliExpress is also making every effort to grow.
By comparison, Amazon’s fiscal year 2023 sales were US$574.8 billion, and its fourth-quarter net sales in North America (the United States and Canada) were US$105.514 billion. According to February this year, 36Kr quoted a source from the overseas strategy department of a large company as saying that several Chinese cross-border e-commerce GMVs together accounted for nearly 10% of the U.S. e-commerce market.
The growth success of the four overseas tigers has “knocked on” Amazon’s door. The magic weapon that knocks on the door is low-priced white-label products relying on the Chinese supply chain. In addition, the tax-free regulations in the US market for a single package of less than US$800 provide conditions for “low prices”. But now Amazon has come out of the gate and begun to face low-price competition from Temu, SHEIN and AliExpress.
Chinese sellers are an important supplier to Amazon. One data shows that in 2022, products from Chinese suppliers will account for 70%-80% of Amazon’s supply. Cross-border e-commerce internally refers to the popular products on the platform as “Amazon sales.” Amazon and overseas independent websites have always been the two channels for Chinese brand sellers to gain the greatest profits. Now, with the launch of Amazon’s “low-price store” , for white-label products in China’s vast industrial belt, it undoubtedly adds another sales channel.
In June 2023, Amazon removed Temu from the price comparison system on its platform, but it did not end. But just one year later, the launch of the “low-price store” means that Amazon and Chinese cross-border e-commerce companies represented by Temu are about to face each other and compete directly in the “low-price” trench.
After the news broke, U.S. stocks closed on June 26. Amazon’s stock price rose 3.9%, with a market value of more than two trillion US dollars. On the same day, Temu parent company Pinduoduo fell 1.26%.