Amazon’s new discount marketplace resembles the budget e-commerce model of platforms like Temu, which work closely with Chinese suppliers in marketing and shipping dirt-cheap goods directly to global consumers.
“By leaving pricing in the hands of sellers, Amazon has offered a crucial way for them to maintain profitability,” Wang said.
“We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices and greater convenience,” Amazon said in a statement in response to an inquiry about the new initiative.
“It would be a good opportunity for us to expand our sales channel and lower the risks,” said Li, whose factory makes T-shirts and jeans that only sell for a few dollars.
Li disclosed that he has been cutting back supplies to Temu after being penalised for goods returned by consumers. “It’s hurting our profit, so I’d rather produce less than to bear the costs of the returns,” he said.
While Chinese sellers are eager to jump on this new Amazon bandwagon, it will not be an easy task for the US firm to win consumers over from Temu and Shein in the discount-shopping segment, said Zhang Yi, founder and chief analyst at market consultancy iiMedia.
“Amazon has set its sights on China as an enormous and highly efficient manufacturing hub to provide a variety of cheap goods, but it remains to be seen whether the company can make a smooth shift from its existing model to a low-cost one,” Zhang said.
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The US e-commerce colossus told Asiatic merchants in an invite-only gathering on weekday that this newborn online…
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