Amazon Haul deals with Temu to bring cheap goods from China to buyers

Two weeks before Black Friday, Amazon quietly added a new section to the top of its mobile app. Called Haul, it’s primarily a mobile-only area for ultra-low-cost products shipped directly from China.

It’s Amazon’s answer to the growing popularity of apps like Haul PDD Holdings‘ Temu and fast fashion retailer Shein. Amazon told CNBC that Haul has had millions of unique customer visits since November.

as beforeHaul offers bargains on items like sneakers for $9.98, kitchen items for $5.99, and phone cases for $2.99. Unlike Temu, Haul exceeds the price $20 per offer. It offers free shipping on orders over $25 and offers steeper discounts the higher the cart value. This encourages shoppers to buy multiple items at once, hence the name Haul.

“One of the really interesting things that Amazon is doing is making it completely separate from the main Amazon site,” said Neil Saunders, managing director of GlobalData Retail. “Now there’s a rationale for doing this: They don’t want consumers to trade up to lower-priced goods.”

The trade-off for cheaper prices is slower shipping speeds. Instead of the one- or two-day shipping typically available to Prime members, items on Haul take a week or two to arrive. Although Amazon has courted Chinese sellers for years, it usually acts as a middleman, stocking goods in US warehouses in advance. This increases the speed of delivery, along with Amazon costs that are passed on to the consumer in the price of the product.

Haul and Temu keep prices low by relying on a network of vendors in China to import cheap individual goods into the United States. de minimis provision. Although it faces customs clearance federal review updatedcurrently allows importers to avoid paying duties and taxes on goods priced below US$800.

This leads to longer delivery times but lower prices. It’s a trade-off many Americans agree with, given Temu’s rapid growth since its US launch in September 2022. most downloaded free software in applethe app store has been running for two years.

“It’s not just about fighting Temu,” Saunders said. “It’s also about looking at the opportunity in the low-cost end of the market, which has grown very rapidly across the retail spectrum over the past few years.”

Other cheap e-commerce sites filled with Chinese goods have seen explosive growth in recent years, including Alibaba and the newcomer TikTok Shop sellers flock despite the potential ban.

All of this success occurred despite public protests against the business model’s environmental impacts and labor practices by Shein and other companies reported to be violating human rights. Shane did not respond to CNBC’s request for comment.

House of Representatives in 2023 report Some of the items on Temu were found to have come from the Xinjiang region of China, where genocide against the Uyghur people has been accused. In a statement, Temu told CNBC that it is “committed to supporting ethical, humane and legal business practices” and that “business partners and third-party merchants must adhere to strict labor, safety and environmental standards.”

Amazon too is under investigation Due to the high injury rates in its warehouses by the federal government, Amazon called the report fundamentally flawed. In addition, a federal sentence In July, it was determined that Amazon could be held liable for recalls of defective goods.

None of this stopped the sales numbers from breaking records.

“Consumers are not putting their money where their mouth is. They say they don’t like the results of cheap products, but they still go and buy them in droves,” Saunders said.

Although Haul is only in beta, demand exceeds supply. During Black Friday 50% off, Haul sold some items. Amazon told CNBC that it will expand its selection of hundreds of thousands of products across dozens of categories in the coming weeks.

What does the future hold for Amazon Haul? Could upcoming political headwinds hinder growth in the budget e-commerce space? Watch the video above to learn more.