Price War Escalates as Amazon Targets Chinese Sellers on Temu
Amazon has reportedly instructed Chinese cross-border merchants selling on its platform to cease listing lower-priced products on rival platform Temu, as reported by the South China Morning Post. This move comes as Amazon faces increasing competition from Temu, a budget retailer owned by Chinese e-commerce giant PDD Holdings.
Temu's aggressive pricing strategies have been attracting US consumers, leading to a surge in its market share in the country. The platform was the most downloaded free app in the US in 2024, surpassing popular apps like TikTok. Amazon's response to this competition highlights the challenges it encounters in maintaining its market share against emerging rivals in the global retail landscape.
Anker, a well-known power bank and charging brand, recently removed its listings from Temu, sparking rumours of Amazon pressuring Chinese sellers to list exclusively on its platform. Amazon's local office has reportedly advised managers of top-selling Chinese brands not to list identical items at lower prices on Temu. Sellers found offering more expensive products on Amazon compared to Temu risk being removed from Amazon's "Featured Offer" program.
Responding to media enquiries, Amazon clarified that sellers have the freedom to determine their sales strategies and set prices for their products across different platforms. The company supports sellers' success through a multi-channel strategy, including solutions like Multi-Channel Fulfillment (MCF), allowing sellers to set competitive prices for consumers.
Temu's strategy of offering extremely low prices has attracted consumers with slogans like "Shop Like a Billionaire." However, this pricing approach has raised concerns about the platform's legitimacy and ethical standards. While PDD Holdings, Temu's parent company, has not faced significant moral scrutiny in China, the US market presents different challenges due to heightened concerns over pricing and sourcing practices.
The tension between affordability and ethical considerations is becoming a focal point in Temu's growth strategy, especially in global markets like the US. While Chinese consumers and businesses may be more aligned in terms of values and economic realities, the same may not hold true for international consumers, where ethical concerns play a more significant role in purchasing decisions.
Amazon instructs Chinese sellers to avoid listing lower-priced products on Temu
Temu's aggressive pricing strategies attract US consumers, challenging Amazon's market share
Anker removes listings from Temu amid rumours of Amazon pressuring Chinese sellers
Source: TECHNODE