The Amazon-Shein price war is expected to greatly benefit the American e-commerce giant's sellers. On Tuesday, Dec. 5, Amazon.com Inc. confirmed its plan to reduce seller fees.
Since the multinational tech firm is competing against Shein-a Chinese fast-fashion retailer-Amazon's reduced seller fees will focus on sellers focusing on clothing products. This effort is a clear sign that Amazon is taking its price war against Shein seriously since the giant retailer rarely reduces the fees it charges merchants.
Amazon-Shein Price War to Make Seller Fees Cheaper
A photo taken on August 8, 2023 shows the logo of US multinational technology and logistics company Amazon at their distribution centre in Dortmund, western Germany.
As of writing, Shein is considered the top online marketplace when it comes to low-cost clothes; consumers can even find $9 hoodies and other bargain-basement apparel.
This is what Amazon wants to dominate and it plans to do it by enticing merchants offering low-cost clothes.
"This will make Amazon way more competitive in the low-price apparel category because a dollar or two can make a big difference," explained former Amazon executive Lucas Barnes via Bloomberg.
"Amazon wants to let Shein spend all of its money offering discounts without losing too many Amazon Prime shoppers to the $9 hoodie," added Barnes, who is also the founder of the PNW Web Marketing consulting firm.
When it comes to eligibility, Amazon clothing merchants who are selling clothing products below $15 to 5% beginning January 2024 can take advantage of the seller fee adjustments.
Since Amazon is now trying to dominate the fast-fashion retail industry, consumers can expect a more serious price war between the American e-commerce giant and Shein.
But, it looks like Amazon will have to deal with another threat as a rising Chinese online marketplace tries to compete against it and Shein.
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Temu Now Competing With Amazon, Shein
The Amazon website is seen on December 5, 2017 in Dandenong, Australia. Amazon has ended months of speculation by launching its local website overnight. The online retail giant has started taking orders and shipping products from its 'fulfilment centre' in Dandenong South, offering massive discounts on millions of items.
According to Nikkei Asia's latest report, Temu, a Chinese online marketplace, is starting to gain ground in the United States as it tries to compete against Amazon and Shein in the fast-fashion industry.
Temu, which was launched in the U.S. in September, is a part of Chinese e-commerce group PDD Holdings. As of writing, this rising online marketplace is already expanding into around 30 countries.
These include South America and Europe; with Japan and South Korea being its latest destinations. In June, Temu was able to garner more than 75 million monthly users.
Although this number is just half of Amazon's average monthly users, it still shows that Temu is growing fast as a Chinese e-commerce. When it comes to average time spent on the website, Temu users are estimated to spend 19 minutes per day on the app.
This is higher compared to Amazon users (11 minutes per day) and Shein shoppers (12 minutes per day).
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