Amazon Launches Temu-Like Discount Store with Direct China Shipping: Full Details and Chinese Seller Responses

July 1, 2024
5 min read

Yesterday, Amazon held a press conference in China to unveil a new low-price store offering items priced under 20 USD, aimed at competing with Temu. As a seller in the U.S., you are likely aware of this development, having seen the story on theinformation. At kua.ai, a tool designed for the Amazon seller community, we interviewed our Chinese Amazon seller users to provide you with genuine perspectives from Chinese sellers on this matter.

The event took place on June 26, local time, in Shenzhen. It was an invitation-only, closed-door meeting without prior public announcements, open only to selected Amazon sellers. Although photography was strictly prohibited at the venue, some photos from the event were quickly leaked.

The photo is from the internet and was not taken by kua.ai

The leaked photo displays the scene with the following caption:

A new low-price store, directly shipped from China by Amazon.

This store aims to provide customers with white-label, low-cost fashion, home, and lifestyle products.

Operated from Amazon's warehouses in China, the store promises to deliver products directly to customers within 9-11 days.

Following the meeting, on the evening of June 26, some of the invited Amazon sellers—who are also users of kua.ai—shared the insights they gained from the event. We have compiled this information to bring you the most comprehensive details about this new low-cost venture.

Kua.ai swiftly reached out to several of our users (most of whom will eventually receive an invitation to join Amazon’s platform). We have also gathered and analyzed extensive information from various Chinese Amazon seller communities and social media platforms. We present their feedback here, hoping it will assist our peers in the United States.

  1. Sellers specializing in high-ticket items, who typically do not own factories or choose not to use them, expressed concerns that this new venture might affect the traffic of their FBA products. They indicated a reluctance to experiment with low-priced products in this new store, preferring to maintain their focus on product differentiation and value. P.S. These sellers share a mindset similar to that of native American Amazon sellers.
  2. Sellers of low-priced products are adopting a wait-and-see approach, indicating a high likelihood of acceptance if invited because Amazon is deemed more trustworthy than Temu. Furthermore, Amazon allows sellers to autonomously set prices in this low-cost store, unlike Temu, which imposes stringent pricing constraints on its merchants.
  3. Some sellers voiced concerns that this initiative would attract numerous listing sellers from a specific city in Southeast China, who may flood the market with low-priced, borderline products.
  4. Other sellers believe this strategy will convert many Chinese Pinduoduo sellers—who previously focused solely on the domestic market and are not current Amazon sellers—into Amazon low-cost sellers. These sellers, typically factories, possess the capacity to offer products at extremely low prices and in large volumes, potentially intensifying competition in the North American e-commerce market. In essence, some domestic Temu sellers are expected to join the Amazon low-cost store, possibly outperforming Temu sellers in aggressiveness.

Additionally, we wish to highlight some observed differences between Chinese and American sellers. kua.ai serves a substantial number of Amazon seller users in both China and the USA. Our observations are as follows:

  1. American sellers invest significantly in understanding their customers and tailoring their products to meet customer needs. For example, they continually collaborate with suppliers to develop superior exclusive products that can command a higher price.
  2. Chinese sellers devote considerable effort to mastering Amazon’s regulations, such as creating SEO-friendly listings and effectively managing PPC advertising. Our AI listing optimizer tool, for instance, is highly popular among Chinese sellers. It has also gained traction among American and European sellers. Its primary feature is the automatic selection and embedding of traffic-generating keywords into your title, bullet points, and long descriptions. Our tool offers greater intelligence and automation compared to others, and we possess a profound understanding of Amazon's A9 and COSMO algorithms. We invite everyone to try it.

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