Temu's low-end version. Amazon officially tests the low-price store "Haul" | Focus Analysis
Author | Zhang Ziyi
Editor | Yuan Silai
In the era of global inflation, it is difficult to find someone who does not like low-priced goods. Americans who want to shop like millionaires have one more choice. On the eve of the "Black Friday" in the US retail industry, Amazon officially launched its low-price store - Haul.
Amazon stated that this service, named Amazon Haul, began to be available to some customers in the US on November 13.
All the goods in the new section will be priced at $20 or less, and most of the goods are priced at around $10 or less. Purchases of goods over $3 can enjoy free returns within 15 days of receipt, which is slightly different from the return policy of Amazon Prime members. Goods ordered through Haul will take one to two weeks to be delivered.
The launch of Amazon Haul, which mainly features white-label goods with lower prices and longer delivery times, is an important attempt and change for Amazon, and it is also a positive response to the fierce competition from Temu and SHEIN.
Temu has become the second most visited shopping website in the world after Amazon. Market research firm eMarketer estimates that Temu's share of the US e-commerce market may triple from 0.7% last year to 2.3% next year.
Although Temu's share is small, its growth rate cannot be underestimated. Moreover, Chinese cross-border e-commerce platforms like Temu are also constantly looking for Chinese sellers on Amazon and inviting them to settle on their platforms.
Chinese cross-border sellers are not only the key to the competition among platform parties, but also an important force for development. Only China's productivity can continuously supply low-priced and abundant goods.
Amazon can no longer remain idle.
01 "Temu" or not "Temu"?
How popular is Temu in the US? It has become an Internet slang used to describe a low-end version of something (a product). Ironically, after the launch of Amazon Haul, some foreign media evaluated it as: Temu's Temu version, meaning that Haul is a low-end version of "Temu".
Amazon stated externally that in addition to a maximum price of $20, most prices will be lower than $10 (GBP 7.90). For example, a three-piece razor set and an "elegant necklace, bracelet and earring set" are each priced at less than $3. Orders of $25 or more can enjoy free shipping, and the delivery time is one to two weeks.
In the invitation to sellers from Haul, some sellers found that Amazon's preference for categories is low-price fashion, furniture and daily necessities, which is generally biased towards daily necessities. This is also a category that Temu is relatively good at and rich in.
When opening Haul, it can be found that the prices of most goods do not exceed $10. It is even an extremely low price.
Image from the Amazon app
The "noisy" appearance and exaggerated promotional slogans of Amazon Haul can't help but remind people of Temu, and its products have also changed from the traditional star rating of Amazon to being marked with the "best-selling" badge and different color schemes. "Haul" itself is also used on the Internet to refer to shopping collections and shopping sharing, and it can be seen that Haul is doing its best to cater to young people.
The reason for the change is also simple. Fun plus low prices is the new change that attracts American consumers to shop online.
According to data from Salesforce, 61% of people believe that low prices are the main reason for them to use low-price shopping apps such as Temu, but the entertainment value of these shopping platforms plays a crucial role in their success.
In addition, Salesforce's November 2024 Consumer Sentiment Survey shows that among 21% of Americans, they believe that these markets (such as emerging e-commerce platforms like Temu) are more enjoyable than traditional shopping. Half of them say this is because they can impulse-shop at low prices, and 47% particularly enjoy the "treasure hunt" experience.
Haul is indeed learning from "Temu".
02 A Conservative Offensive Posture
A Chinese supplier of Amazon Haul told Yingke: "There were orders during the internal testing stage before the launch. Two days after the official launch, I feel that the sales volume and traffic are very considerable. I personally think the sales volume on the first day is also OK. On the second day of the launch, I feel that the traffic is large and the sales volume is considerable.
Because orders could be made during the internal testing stage, this supplier is more optimistic about Haul. However, although it is approaching "Black Friday", he has not received any "Black Friday" related activities on Haul.
Amazon's test of the low-price store is actually relatively conservative in its posture.
In Amazon's closed-door meeting in June, Haul was planned to appear on the homepage of the main site in the "store-in-store" model - that is, to set up an independent section entrance of the "low-price store" on the Amazon homepage. The underlying technical framework is shared with the main site, but the presentation of the page will be different, and the supplier's back-end management is the same as that of the main site.
Consumers still have to make an effort to find Haul on Amazon. Haul has not yet appeared in the navigation bar of the Amazon main page. It needs to be searched for "Haul" in the Amazon APP to be accessed, and it is only available on the mobile side.
Yingke learned that only the homepage of the Amazon mobile APP of some users will have the entrance of the low-price store "Haul". For consumers who do not know Haul, the restraint of the main site's publicity and drainage may affect the traffic growth of Haul in the future.
Considering the fairness issue for many third-party sellers on the Amazon platform, Amazon must be restrained in attracting customers for Haul. (Note: "Attracting customers" is an approximate translation for "引流". Without more context or a more specific explanation of what is meant by "引流" in this particular case, it's difficult to provide a more accurate translation.)
For sellers of Haul, Amazon adopts a targeted invitation system and gives sellers the right to set their own prices.
The above-mentioned Haul supplier said: "There is a price ceiling for goods in the category, and the specific pricing is determined by the merchant."
The right of Haul to set its own prices is a major feature that makes Amazon completely different from Temu, and giving sellers the right to set their own prices may also attract more sellers in the future.
The problem is that the freedom of targeted invitation of sellers and the right to set their own prices also makes the product category richness of Haul not as good as that of Temu, with no significant difference. In some cases, the prices of some goods are even higher than those sold on Amazon.
For example, some shoppers found that a 6-piece set of silicone reusable food storage covers on Haul is priced at $3.99. There are similar products on Amazon that can be delivered in two days and are priced at $3.97.
Of course, the more realistic problem facing Haul is the policy risk.
The US government stated in September last year that it will limit the use of a tax policy called the "de minimis rule", from which Temu and other companies have benefited. This policy allows packages valued at less than $800 to enter the US duty-free or without customs inspection.
The launch of Haul also relies on this exemption policy. Before launching the low-cost store, Amazon sellers (including Chinese and American sellers) used sea shipping to send goods from China to FBA warehouses separately for domestic delivery within two days or less. Sellers of Haul send goods to Amazon's warehouse in Guangdong. Customer orders will be shipped by air from Guangdong and delivered to US shoppers within 9 - 11 days, which meets the minimum threshold and therefore is also duty-free.
Once the "de minimis rule" is adjusted and changed, it is not only Chinese overseas enterprises that will be affected.
However, Amazon has a solid enough foundation in the US. What really worries practitioners is the adjustment of the US tariff policy next. The indiscriminate imposition of tariffs will severely hit the cross-border e-commerce industry. This is the difficulty that Amazon and its Chinese rivals must overcome.