Two weeks before Black Friday, Amazon has quietly added a new section at the top of its mobile app. Called Haul, this area is a mobile-only area that sells ultra-cheap items, mostly shipped directly from China.
Haul is Amazon’s answer to things like Pinduoduo HoldingsTemu and fast-fashion retailer Shein. Amazon told CNBC that Haul has had millions of unique customer visits since its launch in November.
Like Temu, Haul also offers low-priced items such as sneakers for $9.98, kitchenware for $5.99, and phone cases for $2.99. Unlike Temu, Haul limit price The product is priced at $20 per serving. It offers free shipping on orders over $25, and the higher the cart value, the bigger the discount. This encourages shoppers to purchase multiple items at once, hence the name Haul.
“One of the really interesting things Amazon has done is completely separate it from the main Amazon website,” said Neil Saunders, managing director of GlobalData Retail. “Now, there’s a logic to that: they don’t want consumers to buy low prices. price goods.”
The trade-off for cheaper prices is slower shipping. Items on Haul typically take one to two weeks to arrive, while Prime members typically take one to two days to arrive. While Amazon has been courting Chinese sellers for years, it often acts as a middleman, stocking U.S. warehouses with goods in advance. This increases shipping speeds and increases Amazon’s costs, which are passed on to consumers through the price of the goods.
Haul and Temu relied on their existing networks of Chinese sellers to import cheaper items into the U.S. under the Tariff Act, driving down prices. minimum requirements. While the customs exemption is facing new federal scrutiny, it currently allows importers to avoid paying duties and taxes on goods worth less than $800.
This results in longer shipping times but lower prices. Given Temu’s explosive growth since its U.S. launch in September 2022, it seems that many Americans can accept this trade-off. apple‘s app store has been open for two consecutive years.
“This is not just fighting Temu,” Sanders said. “It’s also about looking at opportunities in the lower-priced part of the market, which has been growing very fast across the retail spectrum over the last few years.”
Other low-cost e-commerce sites chock full of Chinese goods have exploded in recent years, including Alibaba And newcomer TikTok Shop, where sellers are flocking despite a possible ban.
All of this success occurred despite public outcry over the environmental impacts and labor practices of this business model through shayne and other companies that have been reported to have violated human rights. Shein did not respond to CNBC’s request for comment.
2023, House of Representatives Report Some of the items found on the Temu came from China’s Xinjiang region, where forced labor has led to accusations of genocide against the Uyghurs. Temu told CNBC in a statement that the company is “committed to upholding ethical, humane and legal business practices” and that “business partners and third-party merchants must adhere to strict standards regarding labor, safety and environmental protection.”
Amazon too Under investigation Federal government criticized for high injury rates in warehouses, despite Amazon saying the report fundamentally flawed. Additionally, a federal ruling in July determined Amazon was liable for recalls of defective goods.
None of this has stopped the sales figures from breaking records.
“Consumers don’t walk the talk. They say they don’t like the consequences of cheap products, but they still buy them in droves,” Sanders said.
Although Haul is only in beta version, Demand appears to exceed supply. During the 50% off Black Friday sale, some items at Haul are already sold out. Amazon told CNBC it will expand the selection to hundreds of thousands of items in dozens of categories in the coming weeks.
What does the future hold for Amazon Haul? Will the upcoming political headwinds hinder the growth of the budget e-commerce space? Watch the video above to learn more.
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