In a move to challenge fast-fashion giants Shein, Temu, and the TikTok Shop, Amazon unveiled its new digital storefront, “Amazon Haul,” on Wednesday. The new platform offers customers access to low-cost products but with extended delivery times, as items ship directly from a warehouse in China. This approach mirrors the business models of Shein and Temu, which have gained popularity by providing low-priced goods directly to consumers. TikTok, a social media powerhouse with over 150 million U.S. users, also launched its own shopping platform, the TikTok Shop, in September 2023. Through this in-app marketplace, TikTok users can buy and sell products during live videos and through advertisements. TikTok’s entry into e-commerce signifies its ambition to capture a larger share of the market, setting a goal of reaching $17.5 billion in merchandise value by 2024. However, TikTok Shop has encountered challenges, including concerns about fraudulent vendors selling counterfeit or subpar products. Reports from Media Matters for America and the Better Business Bureau have highlighted these issues, with one incident involving the sale of counterfeit Ozempic on TikTok.
Shein and Temu’s Threat to Amazon
Amazon’s decision to launch Amazon Haul reflects its recognition of Shein and Temu as significant competitors. The Wall Street Journal reported that Amazon sees these companies as greater threats than major retailers like Walmart and Target. Since its September 2022 U.S. debut, Temu has expanded its user base to over 51 million monthly users. During the same period, Amazon’s monthly U.S. user base reportedly dropped slightly, although Amazon denied any decline. Temu’s rapid growth can be attributed to aggressive advertising, including a high-profile Super Bowl commercial that raised its profile as a competitor to Shein. Shein, founded in 2008, has established itself as a major player in e-commerce, achieving $22 billion in revenue in 2022 and a valuation of $66 billion. Both Shein and Temu have been scrutinized for concerns regarding product quality and ethical business practices. In 2022, a congressional probe into these brands raised alarms over potential forced labor in their supply chains. Shein, in particular, has faced calls from lawmakers and state attorneys general to demonstrate that its products are free from forced labor, following allegations of sourcing materials from the Xinjiang region of China.
Amazon’s History of Aggressive Competition
Amazon haul underscores its commitment to retaining its dominance in e-commerce, an approach it has previously applied to other competitors. In 2016, Amazon established the “Wayfair Parity Team” to compete with the furniture retailer, emulating its product offerings. In 2020, Amazon set its sights on Shopify, forming a task force to study and replicate aspects of Shopify’s business model. This strategic initiative with Amazon Haul appears to be a continuation of Amazon’s competitive tactics, allowing the company to address shifting consumer preferences toward low-cost, fast-fashion platforms. However, the challenges faced by TikTok, Shein, and Temu illustrate the complexities Amazon will need to navigate as it ventures into this market.
