Amazon to launch new service for low-cost goods from China

Amazon is planning a new service focused on shipping cheap fashion, home goods, and other products directly from warehouses in China. The news comes from a Wall Street Journal report detailing an invite-only meeting Amazon held with Chinese merchants on Wednesday. According to a presentation slide viewed by the Journal, Amazon will unveil a dedicated channel on its platform to sell unbranded Chinese goods.

Faster shipping from China

A key aspect of the plan is the shipping speed. Amazon promises delivery within nine to eleven days of order placement, achieved by shipping directly from China to US customers. This marks a shift from the current system, where products from Chinese merchants are typically routed through US warehouses before reaching consumers.

While details remain scarce, a mock storefront slide showcased phone cases, mugs, and facial massage tools, hinting at the product range. An Amazon spokesperson acknowledged exploring “new ways to work with selling partners” to offer lower prices and wider selection but did not comment on specifics.

Countering the threat

This move by Amazon signifies a critical step to defend its US e-commerce dominance against the rising threats of Temu and Shein. While Amazon has emphasized fast deliveries and easy returns, Temu and Shein have captured customers with rock-bottom prices. Amazon executives have been grappling with a response, as reported earlier by the Journal, with the two competitors betting on a market for budget-friendly items with longer delivery times.

The rapid growth of these challenger platforms, shipping directly from China with minimal US inventory, has undeniably threatened Amazon’s position. Temu currently holds the top spot for most downloaded free apps on the Apple App Store in the US, with Shein following at number seven, according to data provider Sensor Tower.