In an effort to compete with low-priced, fast-fashion retailers like Shein, Temu and the TikTok Shop, Amazon launched its new “Amazon Haul” digital storefront Wednesday morning, offering goods at low prices but longer delivery times, as products ship directly from a Chinese warehouse.
Key facts
- In Amazon Haul, a distinct storefront available only on the retailer’s mobile app or on mobile browsers, a range of products including home goods, clothing and electronics are available for $20 or less, with most under $10, the company says.
- Though Amazon is known for its speedy delivery times through Amazon Prime, which offers one-, two- or even same-day delivery, typical delivery times for Amazon Haul purchases range from between one to two weeks, the company says.
- Amazon Haul items take longer to deliver because they ship directly from warehouses in China, The Wall Street Journal reported, a similar method to Shein and Temu (Shein is a Chinese company, and Temu is owned by the Chinese e-commerce company PDD Holdings).
- Amazon says it screens products available on its Haul marketplace to make sure they are “safe, authentic, and compliant with applicable regulations.”
- Products purchased for under $3 are ineligible to be returned, Amazon says, and orders purchased for over $25 are eligible for free delivery.
Tangent
Last year, TikTok also launched its own shopping operation to compete with Temu and Shein. The social media giant, which boasts over 150 million U.S. users, launched the TikTok Shop in September 2023, allowing users to buy and sell products directly in the app through a marketplace tab, in live videos and through video advertisements. Earlier this year, TikTok said it wanted to grow its shopping venture to $17.5 billion in merchandise value in 2024. The TikTok Shop, however, has faced some criticism, including a warning from the Better Business Bureau that scammers may be selling faulty products. The left-wing group Media Matters for America reported some vendors sold bootleg health products, which TikTok Shop rules prohibit, and one woman was charged earlier this year for selling counterfeit Ozempic on TikTok.
How big of a threat are Shein and Temu to Amazon?
The Wall Street Journal reported earlier this year Amazon began viewing Shein and Temu as bigger threats than retailers like Walmart and Target, citing people familiar with internal company meetings. Temu’s monthly U.S. user base has grown to 51.4 million since its September 2022 launch, over which period Amazon’s U.S. user base fell from 69.6 million to 67 million, according to the Journal, though Amazon said it did not report a decline in usership. Temu quickly rose to prominence in 2023 thanks to a massive advertising campaign that included a Super Bowl commercial, positioning itself as a competitor to Shein. Shein, which launched in 2008, reportedly generated $22 billion in revenues in 2022 and was valued at $66 billion last year, The Wall Street Journal reported.
Chief critics
Both Shein and Temu have faced criticism for the allegedly poor quality of their products and concerns over working conditions. Last year, a congressional probe into Shein and Temu found an “extremely high risk that Temu’s supply chains are contaminated with forced labor.” Congress and a coalition of state attorneys general have pressed Shein to prove it does not use forced labor, citing a Bloomberg report that found some clothing the retailer sold was produced with cotton from the Xinjiang region of China, where the U.S. believes the Uyghur people are subject to forced labor.
Key background
Amazon has been known to aggressively combat competitors. In 2016, the company reportedly set up what it called the “Wayfair Parity Team” to compete with the furniture retailer, aiming to replicate many of its products. The Wall Street Journal reported Amazon focused on competing with Shopify in 2020, creating a task force to study the company and replicate parts of its business model.
