Amazon (AMZN) recently raised eyebrows by taking an unexpected step to compete with two of its most significant threats in retail, Temu and Shien, which are Chinese marketplaces that offer products at significantly low prices.
According to a survey from Omnisend last year, 57% of American consumers said they shop at Temu, which sells a wide range of products usually priced between $1 and $50. Also, 43% of Americans said they shop at Shein, which prices items between $5 and $50.
In response to this increased demand for low-priced items, Amazon launched a competitive new service in November called Amazon Haul, which directly competes with Temu and Shein. The service offers products in categories such as home, lifestyle, fashion, and electronics that are priced at $20 or less.
Related: Amazon unveils new service to compete with Temu
Amazon said that the majority of these items sell for $10 and under, with some priced as low as $1. Most of these products are shipped from sellers in China, and customers can also receive discounts on their entire orders.
Some examples of these unusually cheap items include an iPhone 16 case for $1.79 and a necklace, bracelet, and earring set for $2.99.
“Amazon rarely reacts this quickly to competition, but the launch of ‘Amazon Haul’ proves that Temu and Shein are changing the game,” said Greg Zakowicz, Omnisend senior e-commerce expert, in a Feb. 19 press release. “Temu’s ability to offer near-identical products at lower prices is forcing Amazon to rethink its pricing strategy and push harder into the budget-conscious segment.”
Amazon Haul is struggling, new survey says
Despite this generous offer, Amazon Haul is struggling to attract shoppers months after its launch. According to a new survey from Omnisend, only 16% of respondents use Amazon Haul at least monthly, which lags behind the 28% who use Temu and 23% who use Shein.
TikTok Shop is also gaining more traction among consumers than Amazon Haul.
A man with a bank card in his hand sits at his laptop and looks at deals on Amazon’s online shopping site.
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During an earnings call in February, Amazon CEO Andy Jassy said that Amazon Haul is “off to a very strong start.”
Just last month, Amazon announced that it is planning to expand Amazon Haul globally, with the service launching in Europe later this year. The company also recently added storefronts from popular lifestyle social media influencers onto the Amazon Haul homepage to attract more customers.
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While Amazon Haul appears to be lagging behind its competitors, Amazon does have the upper hand when it comes to consumer trust. According to recent research from Omnisend, Amazon products have an average of 50,000 reviews per listing, while Temu only has an average of 1,500.
Amazon Haul, Temu and Shein face major threat
Despite the increase in popularity of Chinese marketplaces, these services are now facing a significant threat.
On March 4, President Donald Trump increased his previous 10% tariff on all goods imported from China to 20%. Tariffs are taxes companies pay to import goods from overseas, and the extra cost is often passed down to consumers in the form of price increases.
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Research from Omnisend shows that 42% of Americans oppose new tariffs on Chinese goods, while 56% of Americans are worried that tariffs will increase prices.
Also, 29% of Americans in the survey said that if prices increase, they would immediately stop or make fewer purchases from sellers in China. More than 20% of Americans even said they would still shop at Chinese marketplaces unless the price increase were more than 20%.
“Temu may still be able to undercut the prices of domestic products on Amazon as they have such high margins,” said Zakowicz in the press release. “However, I expect consumers will soon see price hikes, particularly in categories including consumer electronics, beauty, children’s clothing, and household goods – all categories that are popular on Temu. If manufacturers have a reason to raise prices – even on existing inventory – they will.”
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