Amazon's new budget storefront to compete with Temu and Shein, offering $20 sofas and low-cost goods

In brief: Following reports earlier this twelvemonth that Amazon is responding to title from Shein and Temu pinch its ain fund storefront, soul documents person revealed nan benignant of prices it will beryllium charging. Merchants will beryllium taxable to utmost value caps, including nary much than $20 for sofas.

Back successful June, Amazon announced that it was launching a secondary storefront astatine an invite-only convention for Chinese sellers. The shop will alteration them to vessel their items straight to US consumers, allowing Amazon to compete pinch Temu and Shein, which person been attracting much customers acknowledgment to nan rock-bottom prices they connection – contempt nan often dubious quality.

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Amazon said astatine nan clip that nan storefront would characteristic a assortment of unbranded items, galore priced nether $20.

According to a caller study from The Information, Amazon has informed merchants astir nan value caps it is imposing connected its secondary store. The messages see a database of 700 items, specified arsenic $8 for jewelry, $9 for bedding, $13 for guitars, and $20 for sofas.

Amazon plans to complaint sellers little fulfillment fees for items sold done nan low-cost storefront. Sellers would beryllium charged betwixt $1.77 and $2.05 to vessel a 4-to-8-ounce item. That represents important savings complete nan $2.67 to $4.16 Amazon charges for items of a akin weight shipped nether its Fulfillment by Amazon programme from a home warehouse.

The items will beryllium shipped to customers successful nan US straight from a installation successful Guangdong, China. The study says that nan store's shipping times would beryllium a batch slower than Amazon's main store: betwixt 9 and 11 days.

The complaint astatine which Amazon's income are expanding is slowing. They were up conscionable 5% successful Q2, down from 7% successful nan erstwhile quarter.

Amazon said nan number of Chinese sellers connected its marketplace grew by 20% year-on-year successful 2023. The number of Chinese merchants pinch income complete $10 cardinal besides increased, by 30%.

A study of 7,000 American teenagers successful 2022 classed Shein arsenic their 2nd favourite e-commerce website. Its debased prices, on pinch its strategy of predicting and testing manner styles, and beardown societal media marketing, thief it entreaty to Gen Z consumers successful nan US.