Strict price caps will be applied to “ultra-low-cost store” products that Amazon is known to launch to combat low-cost attacks from Chinese e-commerce companies such as Temu and Shein.
“Amazon has presented a price cap to sellers who will enter the ultra-low-priced store,” Deformation reported on the 23rd. By item, the price limit was $8 for jewelry, $9 for bedding, $13 for instrument such as guitar, and $20 for sofas. Amazon first proposed the launch of the ultra-low-priced store at a closed meeting held in June.
Amazon plans to choose to ship products ordered by U.S. customers from ultra-low-priced stores directly from warehouses located in Guangdong Province, China. As it does not go through U.S. warehouses, sellers will also be charged much less fees. However, the delivery period is expected to take an average of 9 to 11 days, longer than one to two days for regular products.
Analysts say this is an unusual attempt for Amazon, which has never placed price restrictions on sellers through the platform. Amazon holds a high share of about 40 percent in the U.S. e-commerce market. However, as Chinese e-commerce platform Temu and others aggressively entered the U.S. market with ultra-low prices, a sense of crisis is growing. “The competition to secure sellers between the two platforms is also intensifying,” the Nihon Keizai Shimbun said. “Temu is encroaching on each other’s clients as it expands its U.S. business.”
SALLY LEE
US ASIA JOURNAL
