Amazon CEO Andy Jassy (Getty Images)

Amazon is the newest discount Chinese retailer

Amazon took a page out of Temu and Shein’s book: cheap shipping from China to US consumers.

11/14/24 4:02PM

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.

Hyunsoo Rim

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.