All items on Haul will be priced at $20 or less and take up to one or two weeks for delivery
WSJ Nov 13, 2024
By Denny Jacob
Amazon.com is launching a new section to its app focused on items that cost $20 or less as the e-commerce leader looks to fend off rising competition from low-cost platforms Temu and Shein.
Amazon said the offering, dubbed Amazon Haul, was available to some customers in the U.S. starting Wednesday.
The Seattle company said all items in the new section would be priced at $20 or less with the majority around $10 or under. Purchases over $3 would be eligible for free returns within 15 days of delivery, a slight difference from its return policy under an Amazon Prime membership. Items ordered through Haul will take up to one to two weeks for delivery.
Dharmesh Mehta, Amazon’s vice president of Worldwide Selling Partner Services said the new storefront would make shopping for fashion, electronics and other items more “fun, easy and affordable.”
The new Haul tab on Amazon’s app works hard to show it is a very different part of the “everything store.” The new section uses brighter colors, flashing animation and a lot of emojis.
It highlights “crazy low” prices of things such as a $1.99 iPhone case and a $4.99 ■■■■■ pack. Item descriptions include a running count of how many of each product are left at that price. The item descriptions also point out that while it can take more than a week for delivery, most deliveries are within seven days.
Amazon’s decision to dabble in pitching lower-priced products with slower delivery times is a direct response to competition from Temu. It has been planning a new storefront since earlier this year for a section focused on bargain-priced items like those on Temu.
The new section will help Amazon attract consumers who want to save money and are willing to wait longer for products to arrive directly from China. Categories such as household goods, electronics, appliances and clothing work well with direct-from-China deliveries, and customers are more willing to wait for them, analysts say.
Temu, which is backed by Chinese e-commerce company PDD Holdings, has been targeting Amazon’s sellers as well as its consumers. It has used surprisingly low prices and different games, giveaways and other ways to highlight its discounts to become the second-most-visited shopping site in the world behind Amazon.
While it is still tiny compared to Amazon in the U.S., it is growing. According to an estimate from research firm Emarketer, its share of the U.S. e-commerce market could triple from 0.7% last year to 2.3% next year.
Temu’s rise is one of Amazon’s greatest challenges in years. The rivalry echoes Amazon’s battles with Walmart, Target and eBay, which pushed Amazon to cut prices, expand its services and speed up deliveries.
Temu has been targeting the many sellers that post their products on Amazon’s site. Sellers say they are trying Temu because it doesn’t charge them high fulfillment fees or advertising charges. The sellers say the lower fees can enable lower prices on Temu while letting them make more money off of the deals on the discounted site.
Amazon has long been the dominant player in the e-commerce market because it reaches so many consumers and can advertise, recommend and deliver products efficiently.
The Biden administration said in September that it would restrict use of a tax policy called the de minimis rule that has benefited Temu and others. The policy allows packages valued at under $800 to enter the country without duty or customs screening.
Temu and its bargain competitor, Shein, rely heavily on the provision. Amazon sellers also use it for some deliveries. Companies expect the policy changes to undergo a public comment period before any final decisions are made.
. No knock off legos lol.