Amazon’s market cap might have just hit US$2 trillion thanks to AI madness, but “the everything store” is hard at work to revive what was once its bread and butter: online shopping.
What happened: Amazon is planning a new discount section filled with no-name home goods and apparel that will be shipped directly from factories in China. If this sounds familiar, it’s because Temu and Shein have used the same business model to rise to prominence.
Why it matters: With online shoppers now prioritizing discounts above other factors, like the speed of a delivery, Temu and Shein have gobbled up e-commerce market share with their rock-bottom prices. In the process, they’ve become Amazon’s top competitive focus.
- If Amazon can come close to Temu and Shein on pricing, it’ll be well-positioned to ward off the pesky upstarts thanks to its strong brand recognition and consumer trust.
Big picture: Other retailers are trying to be Temu. Like Walmart, which has courted Chinese direct-from-factory sellers for its third-party shop. Per firm Marketplace Pulse, 73.8% of new Walmart Marketplace sellers in April were Chinese, up from just 1.8% in April 2023.—QH