Amazon is closely watching Temu, and the story between domestic e-commerce giants is repeating.

作者 | Li Xiaoxia

编辑 | Qiao Qian

When Pinduoduo went public in 2018, it stated in the "Letter to Shareholders": Pinduoduo is not a traditional company. It emerged when everyone believed the e-commerce landscape was fixed and the history had been written.

Five years later, Pinduoduo's market value briefly surpassed Alibaba, which once claimed it couldn't find a competitor even with binoculars. Looking back, Pinduoduo was able to rise in the hardened soil, to some extent, thanks to the neglect of its rivals, leaving sufficient time for this new e-commerce platform to grow freely.

Now, Temu is making rapid progress, and there is an extremely similar plot behind it.

Since its launch in September 2022, for a long time, Temu has not been regarded as a threat by Amazon. Based on the differences in products and prices, they cultivated in non-intersecting areas.

The alertness emerged in early 2023.

At that time, Temu launched the fully managed model, in which the platform takes care of logistics performance, operations, traffic placement, pricing, after-sales service and other functions. Sellers only need to send the goods to the domestic warehouse.

This model of Temu can be said to have a zero threshold for going overseas. Some factories that have never engaged in cross-border e-commerce and cross-border e-commerce beginners who don't know English have opened the door to do transoceanic business. A seller once described to 36Kr the difference between selling goods on Temu and Amazon. The former is like reciting the multiplication table, while the latter is like doing advanced mathematics problems.

Among peers, it has even set off a trend of fully managed services. AliExpress, Shopee, and TikTok Shop have successively launched fully managed services.

Amazon is also among them.

In September 2023, Amazon launched an "end-to-end supply chain service" similar to the fully managed model. Sellers transport products to warehouses around the world through Amazon Global Logistics, and then use the Amazon Warehousing & Distribution (AWD) network to manage inventory, achieve automatic replenishment, and finally complete the performance through Amazon Logistics (FBA) for sorting, packaging, and distribution.

In the book "Competing Against Time" written by two senior partners of the Boston Consulting Group, Stalk and Hout, it is mentioned that in a rapidly changing market environment, the response speed of enterprises is crucial. Slow decision-making and actions are like slowing down in the race against time, and eventually, one can only watch the competitors overtake oneself.

With the fully managed model of direct mail in small packages, Temu achieved a sales volume of nearly 20 billion US dollars in 2023. At the same time, the number of independent visitors to Temu in that year reached 467 million, second only to Amazon, making it the second-largest shopping platform in the world.

In this more than one-year of rapid progress, Temu is often compared with SHEIN by the outside world, and the former's external goal is also to surpass SHEIN.

Although the ultimate direction internally is to catch up with and surpass Amazon, at least before the "semi-managed" model was launched in March 2024, this ambition was well concealed.

In the semi-managed model, sellers transport goods to overseas warehouses in advance by sea, and then complete the subsequent delivery and after-sales work according to the orders. Furniture, sports equipment and other high-weight and large-sized goods, as well as electrified products, can be sold on the platform.

In other words, the semi-managed model requires merchants to have the ability to ship overseas, and the Amazon sellers who have developed strong capabilities in logistics and warehousing are the preferred choices of Temu, and are clearly presented on the PPT of the investment promotion conference.

These actions seemed to not have attracted the attention of Amazon at first. They believed that the big sellers only used Temu as a channel to clear inventory and did not have the intention to invest seriously.

But as the business flourished and the big sellers who tasted the sweetness began to change their minds. In addition to clearing inventory, they also began to take this platform seriously. Kevin (a pseudonym), the operations director of an Amazon TOP20 big seller, told 36Kr that his Temu sales are expected to reach 10 million US dollars in 2025. And the seller's Amazon sales last year were 30 million US dollars.

Amazon, which can no longer remain idle, has launched a counterattack.

In June 2024, Amazon announced the opening of a dedicated "Low-Price Store" section on the main site, clearly focusing on white-label products with a selling price of less than $20 and a weight of no more than 1 pound, in response to Temu's low-price strategy.

In November, Amazon's low-price e-commerce platform Haul Value Shopping was officially launched as an independent section within the site. To some extent, Haul is Amazon's version of Temu, currently only open in the United States, and merchants are invited by targeted invitations.

A bigger counterattack broke out in December.

Some netizens exposed on social platforms that Amazon requires the top twenty big sellers on the platform to choose between Amazon and Temu. And the sudden closure of the brand store of Anker, a top Amazon seller and mobile charging brand, on Temu's US site pushed this rumor to the forefront.

Subsequently, Amazon responded: "The claim that Amazon requires sellers to sell exclusively on the Amazon Marketplace is not in line with the facts. Sellers can independently decide their sales strategies and can also independently set the product prices on the Amazon Marketplace and other sales channels. In fact, no matter where sellers sell, Amazon will support sellers to succeed through our multi-channel strategies, such as multi-channel fulfillment (MCF) and other solutions. Sellers set their own prices on Amazon and provide competitive prices to consumers through the optional tools provided by Amazon."

According to Kevin's revelation to 36Kr, because the price of his goods on Temu is lower than that on Amazon, the same products on Amazon cannot be added to the shopping cart and thus cannot be sold. Currently, there are about twenty product links affected. Once detected by Amazon, they can only choose to remove the same products on Temu.

In fact, this is not a strategy that Amazon has just introduced. Amazon has always had a price comparison monitoring system that captures and compares the selling prices of sellers on independent sites, SHEIN, Temu, Walmart and other platforms across the entire network. If it is found that the same products on other platforms are cheaper than on Amazon, the sales of merchants' products will be suspended, and even the merchants' stores will be shut down. It is by relying on this strategy that Amazon firmly occupies the position of the leader in the US e-commerce market.

But in 2023, Amazon removed Temu from the price comparison system because the prices of goods on Temu were mostly less than $10 at that time. If a price comparison were made, a large number of Amazon sellers might not be able to escape punishment. So when Temu launched the semi-managed model last year and invited Kevin to settle in during the investment promotion, it said, "It will not be detected by Amazon," which gave Kevin a sense of reassurance. In just a few months, the scale has reached three to four million US dollars.

According to Kevin's understanding, the number and volume of Amazon big sellers on Temu were relatively small before, so they did not attract Amazon's attention. As the business grows larger, Amazon has started the "price scanning" of Temu. According to him, this is not only the case in the US region, but also the European markets have been affected.

"Choose one from two", a somewhat outdated term in the Chinese e-commerce industry, once sparked fierce business wars among Pinduoduo, JD.com, and Taobao. Now, it is being repeated on the other side of the ocean, with the roles changing and the competition continuing.

Sellers seeking opportunities in the gap can only adjust their sails as they encounter. In order to cope with the peak season of categories in March and April, a large number of goods of big sellers like Kevin are already on the way to the United States by sea. If the battle between the platforms continues to rage, he is worried about how to digest the upcoming inventory of goods.

The good news is that a small number of Anker's products have been re-listed on Temu. But for now, Kevin can only choose to remove the Temu products to protect Amazon. When talking about Temu, in addition to some complaints, Kevin is also reluctant to give up the opportunities of Temu. Although other platforms allow merchants to set their own prices, the traffic and business are far less than that of Temu. According to him, for the company, Temu has become the second-largest shipping platform after Amazon.

After more than two years of rapid growth, in addition to Amazon's counterattack, Temu's current development is also beginning to encounter some new challenges. In addition to the external tariff policies, it also needs to think about how to make the existing merchants earn more money to retain them, and how to attract more semi-managed merchants. Previously, 36Kr mentioned that in the past more than half a year, Temu has almost found all the Amazon sellers that can be recruited.

On the other side of the challenge, Temu is trying to launch a platform model to deal with Amazon's blockade by giving merchants more independent management rights. At the same time, Temu is internally testing the in-site advertising function, currently only for semi-managed merchants.

In addition, Temu has released the latest rules, stating that the number of stores opened under one company entity will be limited to no more than 2, and only one can be registered for each of the fully managed and semi-managed models, which means that the days when merchants rely on a large number of stores to distribute goods have become the past.

All the above measures mean that Temu is shifting from a low-price-driven platform to a fine-operation platform. After the wild growth, Temu needs a new set of strategies to fight the future battles.