Amazon may launch a low-price store online! Rolling up to Temu?

Product coupons, price coupons, service coupons...the word "could" can be said to be the "keyword of the year" in the cross-border e-commerce industry in recent years.

With the unstoppable growth of emerging platforms known for their low prices, even a strong company like Amazon could not help but be "caught up" in the price vortex.

It is learned that according to recent industry reports, Amazon is secretly preparing a new project called "Low Price Store". The project adopts an invitation system, focusing on white-label low-priced fashionable home living products, and the investment is almost comparable to Temu.

Amazon has not yet officially announced the news, but according to sellers, Amazon has recently invited some sellers to Shenzhen to hold a closed-door investment promotion meeting for its "low-price store."

According to the meeting content leaked by the industry: Amazon Low Price Store is a store that specializes in providing customers with white-label low-priced fashion, home and daily necessities. The warehouses operated by Amazon in China will be responsible for fulfillment and delivery, and the goods are expected to be delivered directly to customers within 9 to 11 days.

▲ The picture comes from the seller’s disclosure

Consistent with the revelations, “white label low prices”, “fashionable home products”, and “fulfillment by Amazon” all overlap with Temu’s full-hosting business. However, unlike full-hosting, under Amazon’s low-price store project, although sellers do not have the right to advertise, they still have the right to select products, set prices, and participate in activities.

Combined with the meeting content revealed by the industry, here is a summary of the key investment promotion content of Amazon's low-price store project:

1. About the entrance

Amazon will set up a low-price store entrance on the homepage of amazon.com, and the browsing interface will be a secondary page separated from the homepage.

2. About product selection

Category: Fashion, Home & Living

Conditions: White label, low-price, low-weight safety products. Priced under $20, weighing less than 1 pound, within 14*8*5 inches.

3. About logistics

Products enter Amazon China warehouse, which will directly send small packages to end customers, with a delivery time of 9-11 days;

Different SKUs for clothing can be mixed in boxes, but non-clothing products cannot be mixed in boxes

4. About rights and responsibilities

• Sellers: the right to select products, the right to set prices independently and the right to participate in activities.

• Platform: logistics fulfillment, on-site and off-site advertising, commission collection

5. Other key points

• Refund and return policy: No returns for low-priced products below $3

• Performance appraisal policy: separate from the main store and conducted separately

• No follow-up sales, no storage capacity restrictions, no overage inventory fees

▲ The picture comes from the seller’s disclosure

According to a senior seller, Amazon's low-price store has entered the implementation stage and adopts an invitation system. It is expected that the invitation link will be issued to sellers within 2-3 months.

As soon as this news came out, it quickly swept the cross-border circle:

“Is this Amazon’s low-cost fully managed model?”

"The price is going to go up again, it's going to be on par with Temu."

"Is this an upgraded version of full hosting? Pricing power + large traffic, there must be something to play with."

As of press time, Amazon has not yet released any relevant information, and the specific details of the project are still to be followed up. Judging from the reactions of sellers, many sellers are full of curiosity and expectations about Amazon's new project, and the industry is even more discussing Amazon's motives for launching a low-price store.

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Temu, which emerged in 2022, has quickly carved out a niche in the overseas market with its low-price spear. Its leading full-hosting model has set off a wave of extreme cost-effectiveness led by the four little dragons going overseas.

As the global e-commerce hegemon, Amazon has long occupied the leading position in the overseas e-commerce landscape. However, facing the fierce offensive of Chinese e-commerce platforms such as Temu, especially in the context of global consumption downgrade, its market share has inevitably been eroded to a certain extent.

Amazon has always relied on price-performance ratio as an important development logic for its survival. It has formulated a fair pricing policy to constrain the pricing power of merchants, and uses price search algorithms to check whether the products sold on the platform are comparable to those of competitors.

Then, faced with Temu, which was burning money like crazy and promoting extremely low prices, Amazon was initially reluctant to confront it head-on. It had previously announced that Temu did not meet the implementation standards of its pricing policy, so it removed it from the pricing algorithm.

If the above news is true, the launch of the low-price mall may be a means for Amazon to take the initiative and face Temu in the low-price field.

In fact, as early as February this year, Amazon took the lead in testing the waters in India and launched a special store called "Bazaar", which focuses on selling unbranded, fashion and lifestyle products, and the price will be less than 600 Indian rupees (about 7.2 US dollars). Through this low-priced store, Amazon intends to reach the middle and low-income consumer group who pursues cost-effectiveness, thereby grabbing market share from local e-commerce platforms.

Now, it is rumored that the low-price mall that will be launched in the US has many similarities with Bazaar in terms of model and logic. Based on this, it can be inferred that in the face of the low-price impact of Temu and other platforms, Amazon has been planning to expand into the lower-tier markets for a long time.

The reason why Temu can establish an absolute low-price advantage is inseparable from the protection of full trusteeship. Through this model of eliminating middlemen, Temu is able to integrate domestic high-quality supply chains, quickly gather factory-type and integrated industrial and trade sellers with deep sources of goods and independent production capabilities, and achieve extreme cost compression with a highly centralized management system.

Amazon's low-price mall and Temu's full hosting are similar to a certain extent. Both platforms are responsible for logistics, traffic and other operational processes, and sellers are responsible for product selection. However, the difference is that under the Amazon low-price mall model, sellers have the right to set their own prices and manage inventory.

Therefore, in the eyes of many sellers, the launch of Amazon's low-price mall is a mixed blessing.

According to the leaked information, the low-price mall mainly uses white-label tactics and the product prices are low, which is likely to further aggravate the degree of internal competition. Especially for the FBA sellers on the main site, they need to bear multiple cost pressures such as inventory, advertising, warehousing and logistics. Once the low-price mall is opened on a large scale, the main site products may face a huge impact of low prices, and the traffic and market share will be eroded.

However, some sellers believe that, on the one hand, low-price stores will mainly sell unbranded products, which is a huge opportunity for white-label products; on the other hand, the customer base of low-price malls still overlaps with that of Amazon, so they can be used as a testing channel to reduce testing costs and achieve rapid payment.

In general, Amazon's launch of the low-price mall is not just to launch a low-price offensive against Temu. On the basis of the main site taking the brand cultivation route and building a brand moat, the low-price mall, as a new traffic entrance, will extend its tentacles to white-label products, reaching a wider consumer group, and providing the market with more dimensional choices in the context of consumption downgrade.