Faced with fierce competition from Shein and Temu, Amazon is launching its response with Haul, a platform for marketing low-cost products shipped directly from China.
With an ultra-aggressive marketing policy and unbeatable prices, the Chinese giants Shein and Temu have firmly established themselves in the e-commerce sector, particularly in fast fashion. But their rise to power, particularly in the United States, is not viewed favorably by Amazon. Thus, Jeff Bezos’ company announces in a press release the launch of Haul, a new discount app dedicated to selling unbranded products at rock-bottom prices, which are sent to buyers directly from sellers based in China. It is nothing more and nothing less than stepping on the toes of its competitors, even if it means copying their disastrous carbon footprint and promoting unbridled consumerism. It is currently only available in the United States and on mobile.
Shein, Temu and company: a proven economic model
Amazon copies the business model of Shein, Temu and other Chinese platforms, which offer low-priced items and ephemeral collections, whether clothing, electronic devices or household items. To achieve such a result, they resort to small-quantity production that adapts to demand and shipping directly from China – which can take several weeks.
Amazon will therefore do the same, offering a range of unbranded products, such as a variety of clothing, home accessories and everyday items, at prices between $2 and $20. To reduce costs, the product ordered on Amazon will be sent directly by the manufacturer from China, using the dropshipping method, within nine to eleven days. Nothing to do with Prime! The company promises to ensure a selection of sellers in advance and allows free returns within 15 days for items over 3 dollars.
To attract consumers, Amazon Haul adopts the same type of interface as its competitors. Thus, the home page displays a grid layout with lots of small attractive symbols, like rocket emojis indicating the articles “on sale quickly” or fire emojis signaling “crazy prices”in order to highlight promotions and flash sales. Due to overconsumption, customers are encouraged to buy as many products as possible. The e-commerce giant is offering discounts of 5% on orders over $50, or $10 on orders of $75 or more. Plus, shipping is free on orders over $25, otherwise there is a $3.99 fee.
Amazon: towards even more unbridled consumerism?
Amazon is not new to China. Low-cost Chinese products are already widely present on the e-commerce platform – their volume sales have also increased by 20% between 2022 and 2023. However, until now, Amazon has encouraged sellers to use its service “Fulfilled by Amazon,” which involves sending products to the company’s warehouses, which then ships the products in record time, in exchange for fees charged to the original sellers. This new method should allow manufacturers and sellers to save money, and therefore offer products at more competitive prices. Obviously, Jeff Bezos’ company will charge a commission on sales made on its platform.
This new strategy may seem advantageous for consumers, who will benefit from attractive Chinese prices and the advantages of Jeff Bezos’ platform, but it does not fail to raise serious concerns. Indeed, Shein and Temu attract strong criticism not only on a competitive level, but also because of their incitement to overconsumption. Both platforms push consumers to buy low-cost products that they don’t necessarily need, which are often of poor quality and therefore need to be replaced regularly. Suffice to say that the ecological impact is catastrophic… And that’s without taking into account the deplorable working conditions of the employees – the Uyghur people are unfortunately paying the price! In addition, the two Chinese companies do not hesitate to market counterfeits, dangerous or harmful to health items, ignoring the various regulations (see our article). Practices which have placed them in the sights of the European authorities, determined to make them respect the DSA. However, the popularity of these platforms continues to grow…
But this launch comes in a context that is delicate to say the least. Indeed, Donald Trump, who has just been elected President of the United States, and his administration are already considering tougher trade conditions with China, which could significantly impact Haul and the entire e-commerce sector. discount. The billionaire notably proposed imposing a 60% tax on imported Chinese products, which could affect the profitability of this type of model. This risks forcing Amazon to adapt its strategy…