Yahoo Finance Amazon is about to take on Temu and Shein by copying them
If you can’t beat them, join them.
Facing surging competition from Chinese cheap-stuff marketplaces Temu and Shein, Amazon is preparing to launch a new section of its site for Chinese sellers that want to ship their fast-fashion and lifestyle wares directly to U.S. customers. It could go live later this year.
According to multiple reports—The Information got there first—Amazon held a meeting yesterday with the biggest Chinese sellers, detailing the plan. The presentation described a section that’s accessible from the Amazon homepage and targeted at people who will put up with a nine- to 10-day delivery time if it means paying bottom dollar. (We’re talking lightweight items that retail for under $20.)
Amazon’s new tactic would closely follow the Temu and Shein playbook by having sellers send their products to a warehouse in China, from which they would be sent directly to U.S. buyers. Currently, Chinese sellers send their products to Amazon warehouses in the U.S.
The distinction is important because the U.S. has a relatively high “de minimis” threshold of $800 on the value of imported goods: If the value is below the threshold, the item is not subject to import duties. Temu and Shein have both denied that this provision is central to their ability to sell things at ultralow cost in the U.S., but U.S. lawmakers disagree. A House select committee found that Temu’s and Shein’s shipments alone from their Chinese warehouses accounted for almost a third of the billion packages that entered the U.S. in 2023 using the de minimis loophole.
In April, the Biden administration ordered closer scrutiny of de minimis shipments from China, partly to check whether they’re violating the U.S.’s ban on goods produced with forced labor (a common accusation against Shein and Temu, and one that they have strenuously denied). There are also two bills lingering in Congress that would exclude China from the de minimis channel.
This may be one reason why Beijing just issued draft rules to make it easier for Shein, Temu, and AliExpress—at this point the shining beacons of Chinese e-commerce prowess—to finance the construction of new warehouses outside the country. But if America’s Amazon is also about to get into the game of helping Chinese sellers access U.S. buyers through the de minimis channel, those legislative efforts in Congress could find it a little harder to drum up the support they need. (It’s currently unclear whether Amazon’s shipments will use the de minimis channel; I did ask, but an Amazon spokesperson did not answer my question.)
On the other hand, the competition presented by Amazon’s move could further tarnish Shein’s planned IPO, which CNBC said on Monday was set to take place in London, owing to lawmakers’ opposition in the U.S. The date for the flotation is not yet clear, but British human rights group Stop Uyghur Genocide yesterday launched a legal campaign to stop it going ahead at all, owing to those aforementioned concerns about forced labor.
More news below.
David Meyer
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This story was originally featured on Fortune.com
