• Amazon may be launching a new storefront designed to sell products to compete with the low prices offered on Temu.
• Earlier this year, similar reports surfaced, as Amazon grows increasingly concerned with the popularity of Chinese commerce platforms.
• The new storefront would place a price cap on specific price categories in order to lure cost savvy consumers.

Earlier this year we reported on claims that Amazon was working on a new storefront designed to compete with the low price products offered on Chinese platforms like Temu.

Reported by The Information at the time, now the publication (paywall) has a similar report detailing how Amazon’s plan to launch a new affordable product storefront is going.

To that end, The Information cites internal documents it has seen in which potential merchants for the new storefront have been advised on price caps for products that they wish to be listed.

Here we could see upper price limits as low as $8 (~R140) for jewellery, $9 (~R158) for bedding, $13 (~R229) for guitars, and $20 (~R352) for sofas, with the products said to be shipped by Amazon at its fulfilment centre in Guangdong, China.

While none of this has been confirmed by the retail giant at this stage, less than R400 for a sofa prior to any shipping costs is kind of insane, and at the very least would pique the interest of any cost-savvy consumer, which many South Africans are given the rising cost of living.

In order to make such an offering sustainable for Amazon, the new storefront would have far longer lead times for deliveries at between nine to 11 days, as well as lower fulfilment fees to those selling on the platform.

Should such an offering come to fruition, it would be quite the change in tactic from Amazon, which has dominated the online retail space for many years now, but much like Takealot in South Africa, has also felt increased pressure from the low-priced offerings made available on Temu and Shein.

With Black Friday taking place next month, and the increasingly popular Singles’ Day on 11th November, it could be a worthwhile time for Amazon to announce a new storefront for selected regions.

While it remains to be seen if Amazon will indeed launch a new storefront to compete with the likes of Temu and Shein, it is clear that South Africans have gravitated towards the ecommerce platforms hailing from China.

[Image – Photo by James Yarema on Unsplash]