Amazon has officially launched a new low-cost store, Amazon Haul, in a direct response to the growing threat from TEMU, the fast-expanding e-commerce platform. Recently, Amazon unveiled the Amazon Haul store, which promises “insane low prices” on a wide range of products. Orders over $25 qualify for free shipping.

The store’s name is fitting, as most of the products in Amazon Haul are priced under $20, with the majority of items priced under $10. Even items costing more than $3 come with a generous 15-day return policy. However, to achieve these low prices, Haul has made some trade-offs in its delivery service. Unlike regular Amazon orders that typically arrive in 1–2 days, Haul orders can take up to 1–2 weeks for delivery, which sets it apart from the main Amazon marketplace.

In terms of product categories, Haul mostly offers no-name, budget-friendly products, including fashion, home goods, and lifestyle items — a model strikingly similar to that of TEMU. What sets Amazon Haul apart, however, is its adoption of TEMU’s full-service logistics model. Sellers on Haul no longer need to ship their goods to Amazon’s overseas warehouses. Instead, they only need to ship products to Amazon’s domestic warehouse, leaving the rest of the logistics process to Amazon. However, unlike TEMU, Amazon doesn’t overly control product pricing; sellers still have some leeway in setting prices, although there is a ceiling on the maximum price.

From a traffic perspective, Haul benefits from Amazon’s main site. New products in the Haul store share ranking opportunities with main Amazon listings, and some of these items have already made their way to the top of Amazon’s best-seller charts. Additionally, products from the Haul store can be promoted through paid ads. Clearly, Amazon is pulling out all the stops to make Haul a success. In fact, Amazon has been considering a low-price strategy for some time now. Earlier this year, the company lowered its commission fees on low-priced apparel, reducing the rate from 17% to 5% on items priced below $15 and from 17% to 10% on items priced between $15 and $20. Amazon has also launched the Bazaar e-commerce platform in India, a move that mirrors Haul’s low-price approach. Bazaar, like Haul, focuses on low-priced, no-brand fashion and home goods.

TEMU’s Aggressive Expansion

Amazon’s push into the low-cost market is clearly an attempt to counter TEMU’s rapid rise. TEMU, which officially launched in North America in September 2022, has expanded at an extraordinary pace, capturing significant market share in a short time. By October 2022, TEMU had surpassed Amazon to become the #1 free shopping app on the U.S. App Store, a milestone that highlighted its commercial potential and attracted more consumers and sellers to the platform.

By 2023, TEMU had expanded into over 70 countries and regions, including the U.S., Canada, Australia, New Zealand, Austria, Mexico, the U.K., France, Germany, Japan, and South Korea. It has amassed over a billion downloads, and its aggressive discounting strategy during major shopping events like Black Friday has intensified pressure on Amazon’s sales, forcing the retail giant to rethink its promotional strategies. TEMU’s heavy presence on social media has also fueled its rapid growth, drawing large volumes of customers with attractive deals.

In addition, TEMU isn’t content with just capturing consumers; the platform has also set its sights on Amazon’s top-tier sellers. According to reports, TEMU is considering rolling out a platform model that would allow third-party sellers more flexibility in terms of entry requirements. If implemented, this could pose an even greater challenge to Amazon’s dominance in the market.

The Imitation Game: Amazon Follows TEMU’s Playbook

The launch of Amazon Haul’s full-service logistics model is a clear sign that the company is borrowing a page from TEMU’s playbook. The full-service model allows platforms to have more control over the pricing, product offerings, and quality of the items sold, while minimizing the seller’s role to that of a supplier. This gives platforms the ability to implement a more standardized product strategy and ensure more consistent pricing.

After TEMU’s success, Alibaba’s AliExpress was quick to follow suit by offering a similar full-service model just three months later. By last year, other e-commerce giants, including Lazada, TikTok Shop, and Shopee, also embraced the full-service model, proving the growing influence of TEMU’s approach.

As the e-commerce industry enters a phase of market saturation and user growth hits a ceiling, TEMU’s model seems particularly well-suited to the current environment. In fact, it’s no surprise that other platforms are adopting similar strategies. After all, innovation often stems from imitation. However, true success lies in making tweaks and improvements to the existing model, rather than simply copying it.

For Amazon to successfully fight back against TEMU, it will need more than just low prices. It will need to leverage its unique strengths—its vast customer base, brand recognition, and infrastructure—while enhancing its product offerings and user experience.

Conclusion: The Battle Continues

While Amazon’s low-cost stores like Haul may have put it back in the game, TEMU’s rapid growth and aggressive expansion tactics mean that the competition is far from over. TEMU’s focus on low prices and full-service logistics has proven to be an effective strategy for attracting price-sensitive shoppers, but Amazon’s established market presence and vast resources give it a solid foundation. The question now is whether Amazon’s efforts will be enough to retake its dominance or if TEMU’s innovative approach will continue to reshape the global e-commerce landscape.

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