Amazon is the newest discount Chinese retailer

On Wednesday, Amazon launched its new discount storefront, Amazon Haul, to compete with Chinese low-cost e-retailers like Temu and Shein. According to Amazon, all items are priced below $20, with “majority priced $10 and under, and some items as low as $1.”

(I don’t know if I would buy $1 eyelash curlers or oven gloves from Amazon Haul, but I digress.)

As my colleagues David and Hyunsoo noted earlier today, Amazon still dwarfs Temu and Shein’s US shipment volume (Amazon has a 41% share in the US e-commerce market compared to 1% each for the other two) and web traffic (22 billion hits vs. under 1 billion for both combined in 2024). However, thanks to a tax and tariff loophole known as “de minimis,” which makes imported goods under $800 duty-free, DTC Chinese e-commerce companies have exploded since 2016. A congressional investigation from last year showed that in 2022, 30% of all de minimis imports came from Temu and Shein, and 60% came from China.

Ironically, the key to Amazon’s sub-$20 service is simply copying Temu and Shein’s strategy of shipping directly from China. Amazon noted that the typical delivery time for items on its “Amazon Haul” store is “one to two weeks.” The reason for that is because Amazon will be shipping directly from Guangdong, China, according to The Information, and it will charge sellers “significantly lower fulfillment fees” for items sold through its Haul store than it does for domestically shipped items.

While the Biden administration is currently reviewing proposals to end the de minimis loophole, a move that would impact Amazon as much as Shein and Temu, it looks like, for now, the retail giant is taking advantage of one of the Chinese e-commerce companies’ best trade practice.