Amazon is planning to launch a new online store to compete with retail brand Temu, by offering low-priced items that ship directly from sellers in China.
The company made the announcement to a private conference of Chinese sellers on June 26, CNBC reports. Much like Temu’s current model, the new section on Amazon’s website will sell unbranded items at a fraction of their normal cost, shipping straight from China to the U.S. and arriving at consumers’ doorsteps in nine to 11 days.
This marks a departure from Amazon’s existing model, where the company ships items to U.S. warehouses before they’re delivered to shoppers. In July of 2023, it doubled down on that model, when it announced plans to “regionalize” its delivery network in the U.S. by using machine learning to predict where customers will want specific items, and then storing those products at fulfillment centers in those areas.
Amazon has also been critical of Temu’s ultra-low prices in the past. Reuters reported in May of 2023 that Amazon had excluded Temu from its price-searching algorithm, which measures the prices of products on Amazon’s platform against what they’re being sold for elsewhere in order to ensure competitive rates. At the time, the company said that Temu did not meet the requirements for its fair pricing policy.
Amazon has not said when it plans to roll out its new store, although the presentation delivered to sellers indicates that the company will start accepting products by fall of 2024.
