Faced with fierce competition from certain recent Chinese platforms like Temu or Shein, Amazon has decided to act. The American manufacturer has announced the creation of a new section on its site dedicated to low-cost products.
AliExpress, Shein or Temu, you probably know these Chinese platforms known for their low-cost products. In just a few years, these e-commerce sites have eaten up market share almost everywhere.
To give you an idea of the scale of the phenomenon and according to figures from a Les Echos study, Temu reached 11% market share in France between May and October 2023! Since the end of last year, Temu has even become the most downloaded free application from the App Store in France.
Obviously, the insolent success of Shein, Temu and others is starting to worry the world number 1 in e-commerce, namely Amazon. As revealed by our colleagues at CNBC, the web giant has decided to take action to counter these new competitors. In a conference reserved exclusively for Chinese manufacturers and sellers, the Seattle firm announced its desire to create a new section on its site dedicated to the sale of low-cost products.
Also read: Temu- between scams and spying on users, the application is increasingly worrying
Amazon is launching into low-cost… direct delivery!
Like what Temu, Shein and others offer, you will find a little bit of everything, from clothing to cosmetics, consumer electronics, bodybuilding equipment and phone cases. According to Amazon, goods will be shipped directly from Chinaall within an estimated time between 9 and 11 days. On the price side, the average would be around 20 dollars.
As a reminder, Chinese manufacturers had until now to use the “Fulfilled by Amazon” service to sell their goods on the American or European market. In exchange for a commission paid to the American giant, resellers can send their products to Amazon’s distribution centers. The company then takes over for delivery.
Also read: Temu – plagiarism and low prices, the application leads to the bankruptcy of many craftsmen
Amazon generalizes dropshipping
With this new low-cost section, the idea is precisely to bypass this intermediate step. You would have understood it, Amazon generalizes here what we call dropshipping. For the uninitiated, this method boils down to a tripartite systemwhere a seller will take orders without having any stock of their own. In reality, the merchant directly transfers the order (with the delivery address) to the manufacturer of the product, to a wholesaler or to a company specialized in order processing. They are then responsible for shipping the package.
This practice presents risks, firstly for the seller who has no control over the quality of the product, stock management or even the smooth running of delivery. On the customer side, it’s not any better: poor if not absent after-sales service, no guarantee of having the right product, false advertising, overpricing, etc. According to statements from several sources, Amazon plans to launch the first products in this low-cost range by fall 2024.