Recently, Amazon issued a notice to some Chinese cross-border merchants, asking them to stop selling goods at lower prices on its competitor Temu platform .
The move comes amid growing competition with the notoriously competitive Temu, the budget retail platform owned by Chinese e-commerce giant PDD Holdings.
According to multiple sellers, Amazon in the United States notified managers of some popular Chinese brands and asked them not to list the same products on Temu at prices lower than Amazon.
In order to more effectively deal with the competition from Temu, Amazon not only strengthened its internal price monitoring mechanism, but also tracked product pricing on the Temu platform, and used technical means to obtain real-time price information of similar products on the Temu platform, so as to compare and analyze the prices of products on the Amazon platform.
If a seller is found to be selling at a lower price on Temu than on Amazon, the seller may lose the chance to participate in Amazon's "Add to Cart" program, which is also known as "Buy Now" and is displayed prominently at the top of Amazon product pages, allowing consumers to buy the product directly instead of choosing similar products from other merchants.
The products displayed on Temu's website are generally lower in price and shipped directly from China. In order to be eligible for the "Select Offers" program, sellers need to set "competitive" prices for their products, that is, the prices must be lower than or equal to the lowest prices of other major retailers. Amazon has previously excluded Temu from its price comparison system because it believed that some merchants or products were questionable or might be counterfeit products.
Amazon faces a tough battle against rivals such as Temu, fast-fashion site Shein and ByteDance’s TikTok Shop, which have attracted a large number of U.S. consumers with low-priced goods. To address this challenge, Amazon last month launched the “Haul” section of its app, which specializes in selling goods priced under $20.
An Amazon representative said: " Sellers determine their own selling strategies and set product prices, and Amazon does not require them to set specific prices ." In addition, Amazon emphasized that they will highlight offers that they think consumers will choose after comparing all offers in detail.
A Chinese brand merchant selling on Amazon said that hundreds of its products were kicked out of the "Select Offers" program in just three days because the prices of these products were higher than the benchmark prices set by the platform, which seemed to be based on the prices of the brand's Temu store . To avoid further punishment, the merchant changed the pictures of the remaining products on Temu. However, another seller expressed doubts about the effectiveness of this method.
Temu's recommendation algorithm gives low-priced products more exposure, prompting sellers to list products at the lowest possible price. For merchants who choose Temu's "full managed service", the product price is set by Temu.
A Temu representative said: "We support fair and open competition because it is good for consumers. Sellers are able to offer their goods on different platforms, and consumers will get more choices and better options."
Rumors that Amazon was pressuring Chinese sellers to sell exclusively on its platform surfaced last week, and well-known brand Anker has removed its product listings on Temu . As of Monday, Anker's official store on Temu's US marketplace had no products listed, and the last customer review was posted on Sunday. According to reports, the store had more than 40 products when it opened. Another Anker US store that sold refurbished products on Temu was also emptied, with the last customer review posted on Monday. However, Anker's Temu Germany store is still operational and lists 18 products.
Amazon has promoted Anker, based in Changsha, China, as an example of a startup brand that has achieved commercial success on its e-commerce platform.
Since its launch in 2022, Temu has rapidly risen to become the world's third-largest online marketplace, behind Amazon and Alibaba's AliExpress.
This incident will have a significant impact on sellers’ sales strategies. Sellers need to review their pricing strategies on different platforms to ensure their competitiveness on Amazon and avoid being kicked out of the “Add to Cart” program due to inappropriate pricing. In addition, sellers’ pricing and product display on Temu also need to be adjusted accordingly to adapt to the competitive environment between platforms. |