Amazon to Launch Discount Store Targeting Budget-Conscious Shoppers
Amazon to launch discount store - The e-commerce giant Amazon is revamping its strategy to compete with the growing popularity of discount online retailers like Temu and Shein.
The company is set to introduce a new section on its website specifically dedicated to affordable fashion and lifestyle products.
Amazon’s New Strategy to Take on Discount E-commerce Leaders
This unveiling, which took place during a special conference for Chinese sellers on Wednesday, signifies Amazon's most aggressive approach yet to tackle the challenge posed by these emerging discount platforms.
Both Temu and Shein, with roots in China, have witnessed remarkable growth in the U.S. market in recent years.
Amazon plans to launch discount store in bid to fend off Temu and Shein https://t.co/8o0hEQ6shE
— CNBC (@CNBC) June 26, 2024
Source: Twitter/CNBC
Their success lies in offering rock-bottom prices on a wide range of products, including clothing, electronics, and homeware.
Unbranded Products and Direct Shipping from China
The upcoming Amazon to Launch discount store will focus on providing a curated selection of unbranded items, with many priced at under $20. A glimpse into the storefront's offerings, based on a presentation viewed by CNBC, included products like gua sha facial massagers, arm weights, and phone cases.
In a significant shift from its usual operations, Amazon plans to implement a direct shipping model for this venture. Products will be shipped directly from China to American consumers, with an estimated delivery timeframe of nine to eleven days.
Previously, Chinese sellers on Amazon relied on the company's Fulfillment by Amazon service, which entailed shipping their merchandise to warehouses in the U.S. before it reached customers.
Benefits for Sellers and Faster Product Testing
This new approach boasts several advantages for Chinese sellers. It enables them to cut costs and experiment with new products through small-batch production.
This strategy closely resembles Shein's on demand manufacturing model, where limited quantities are initially produced, with the option to scale up production based on customer demand.
Amazon plans to launch a new section on its site dedicated to low-priced fashion and lifestyle items that will allow Chinese sellers to ship directly to U.S. consumers, CNBC has learned. https://t.co/pNuGvOXAJl
— NBC News (@NBCNews) June 26, 2024
Source: Twitter/NBC News
"We are constantly exploring innovative ways to collaborate with our sellers to provide our customers with a broader selection, lower prices, and enhanced convenience," said Amazon spokesperson Maria Boschetti in a statement to CNBC.
While Boschetti refrained from disclosing further details about the company's plans, which were initially reported by The Information, the launch date for the new storefront remains unclear. However, based on the presentation, Amazon will kick off product acceptance for this venture this fall.
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