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Amazon is set to launch a new dedicated section on its main website that closely resembles the Chinese cross-border bargain app Temu. This new platform will offer unbranded products priced below $20, shipped directly from China to U.S. consumers. 

This pivotal move is seen by many as Amazon’s response to the growing competition from Chinese ecommerce platforms like Temu and Shein, which have significantly increased their footprint in the U.S. market by offering a wide range of low-priced products.

Amazon detailed the specifics in a recent closed-door meeting with Chinese sellers, according to The Information, which first reported the news, supported later by CNBC. 

The strategic initiative indicates a shift in Amazon’s approach, as the company has previously avoided direct comparisons with their Chinese rivals. However, faced with increasing pressure on its home turf, it appears that Amazon is intensifying its efforts to attract Chinese vendors and offer similar services.

Three main points that Amazon sellers might find particularly interesting are:

Direct shipping from China

Amazon’s Fulfillment by Amazon (FBA) program has been an important component of their ecommerce success. This new section will allow Chinese sellers to ship products directly from warehouses in China to U.S. customers, bypassing FBA. 

Though experts have said that consumers are less concerned with shipping speed if the products are heavily discounted, this change could lead to longer delivery times (estimated at 9-11 days). 

Product testing opportunities

Sellers might be able to use this platform to test small batches of products before launching larger quantities, similar to Shein’s model for minimizing unsold inventory. This approach allows for more agile product development and market testing, potentially reducing the risk of overstock situations.

Pricing and product control

It appears that Chinese sellers will have the ability to determine pricing and product selection for this new bargain section, giving them more control over their offerings. This increased autonomy could lead to a more diverse and competitive product range on the platform.

How This Move Could Affect Global Ecommerce 

It’s worth noting that this new initiative could have significant implications for the ecommerce landscape:

• The move could serve to boost Chinese sellers’ presence on Amazon’s platform, potentially increasing competition for American resellers of low-cost unbranded goods.
• It could also impact Amazon’s reputation for fast shipping, as the direct-from-China model may result in longer delivery times compared to Prime-eligible products.
• The new section might help Amazon capture a share of the growing market for ultra-low-priced goods, which Salesforce estimates could command 21% of Western spending in the upcoming holiday season.

While an exact launch date for this new storefront has not been announced, reports suggest that Amazon will begin accepting inventory from sellers in the fall. This timeline indicates that the new section will likely be operational after this year’s Prime Day event in July, potentially positioning it as a key player in the holiday shopping season.

As the ecommerce landscape continues to evolve, this move by Amazon demonstrates the company’s adaptability and willingness to compete directly with emerging players in the market. If this comes to pass as predicted, it’s going to be interesting to see how Amazon’s new platform affects both sellers and consumers in the coming months.

Want to keep up with the latest news? The team at Canopy Management has our ears to the ground and will continue to report on the facets of entrepreneurship and ecommerce that affect online sellers. You can always read more of our trending reports here.