Amazon is actively reaching out to Chinese sellers at a meeting in Hangzhou, China. This is because Chinese platforms like Shein and Temu are becoming more of a threat to Amazon’s business.
Online shopping is changing rapidly due to tough competition and market factors. (Photo: Momentum Works)
Amazon’s Strategic Overture: Courting Chinese Sellers to Bolster Market Presence
Amazon is working harder to get Chinese sellers because it has to fight with new discount online stores like Shein and Temu. The e-commerce giant said it would build an “innovation center” near Shenzhen, which is known as China’s tech hub. The center will help buyers in the Asia-Pacific region by launching new products, building their brands, and digitizing their data. Amazon is also letting Chinese buyers use its end-to-end supply chain service, which makes it easier for goods to move and be restocked across multiple channels.
Amazon’s dedication to the Chinese market is shown by the fact that the company’s top leaders attend the yearly conference for sellers in China. Even though Amazon doesn’t do business in China anymore, the country still has a lot of businesses that want to use the platform’s global customer base. Notably, the number of things sold by Chinese sellers on Amazon rose by more than 20% year over year, and in 2023, 30% more Chinese sellers made more than $10 million in sales.
But Shein (which moved its offices to Singapore) and Temu (which is backed by Chinese tech giant PDD Holdings) are becoming more of a threat to Amazon. Shein, which is known for its fast fashion, has added more items to its store, which has brought Amazon sellers there. At the same time, Temu, which has a wide range of products, has quickly grown its advertising, now making up a big part of Google ad views.
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Responding, Amazon recently changed its seller fees by lowering commissions on cheaper clothing items. This was likely an effort to attract traders from Shein and Temu. The competition has effects on more than one thing. For example, Etsy recently laid off workers, saying that strong competition was to blame.
Rapid innovation, intense competition, and ever-changing market dynamics are reshaping the whole online shopping landscape. Amazon now is carefully working with Chinese sellers to keep its global lead.
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