The move marks Amazon's entry into a fast-growing market segment known for extremely low prices and a direct-shipping model from China, giving it a major impact on the ultra-fast fashion market currently led by Chinese giants SHEIN and Temu.
SHEIN and Temu reportedly ship up to 1 million packages to the US every day, highlighting Amazon's notable absence in this lucrative market. Now the Seattle-based giant plans to leverage its extensive infrastructure and customer base to compete in this highly price-sensitive sector.
Industry analysts have highlighted that price is the primary driver of consumer behavior, often outweighing concerns about sustainability or customer service. Amazon's legendary delivery capabilities may take a backseat as consumers show their willingness to accept longer delivery times in exchange for significantly lower prices.
Jianlong Hu, CEO of Brands Factory, said Amazon's new discount marketplace will focus on products under $20 in the fashion, home and lifestyle categories. The model is similar to that of SHEIN and Temu, where Amazon handles shipping directly from its Chinese warehouses to US customers and takes a commission on sales.
The change represents a departure from Amazon's traditional support for small businesses and entrepreneurs, embracing instead SHEIN's data-driven, rapid production model that can take a design from sketch to online listing in less than two weeks.
Despite regulatory challenges, Amazon stands to benefit greatly from this venture, leveraging its base of over 200 million U.S. shoppers. Omnisend's latest data suggests that 57% of U.S. consumers have shopped with Temu in the past year, suggesting that Amazon is well positioned to grab a significant share of this expanding market. Amazon also boasts a higher trust rating than SHEIN and Temu.
