Amazon officials are rushing to improve delivery speed as the company loses millions of customers while Chinese competitors Temu and Shein gain popularity.
The $1.85 trillion company is more concerned about competition from China-based rivals Temu and Shein, compared to its long-standing rivalry with Walmart and Target.
Temu and Shein, fast-growing online retailers that specialize in low-cost goods shipped directly from China, have made significant progress in the US market in less than two years, with evidence that they are already having an impact on Amazon’s business.
Temu saw its user base grow to 51.4 million in January since launching in the US in September 2022, while Shein saw an increase from 20.9 million to 26 million users over the same period, as reported by The Wall Street Journal.
Conversely, Amazon’s user base fell to 67 million from 69.6 million in the same period, according to Sensor Tower data cited in the report.
Temu and Shein, fast-growing online retailers that specialize in low-cost goods shipped directly from China, have made significant progress in the US market in less than two years, with evidence that they are already having an impact on Amazon’s business
Temu saw its user base grow to 51.4 million in January since launching in the US in September 2022, while Shein saw an increase from 20.9 million to 26 million users in the same period.
To counter this competition, Amazon insiders say they are focusing on two aspects of the business: customer trust and fast delivery
To counter this competition, Amazon insiders say they are focusing on two aspects of the business: customer trust and fast delivery.
Amazon is developing strategies to promote reliability and fast delivery, and is also working to increase same-day delivery.
An Amazon spokeswoman said the company is looking at competitors, but its staff is “obsessed with customers,” as reported by the WSJ.
The company highlighted its superior selection and faster delivery compared to other retailers, highlighting its achievement of delivering more than 4 billion items same or next day to Prime members by 2023 in the U.S. alone.
Employees aim to expand the range of items available for same-day delivery, especially in categories such as electronics.
Josh Lowitz, co-founder of Consumer Intelligence Research Partners, pointed out the significant volume required to justify its infrastructure.
“Amazon’s logistics are untouchable,” Lowitz says. “You have to have a lot of volume to justify Amazon’s infrastructure, so it will be a long time before anyone can compete with Amazon in reliable convenience.”
Amazon is developing strategies to promote reliability and fast delivery, and is also working to increase same-day delivery
The company highlighted its superior selection and faster delivery compared to other retailers
In July 2023, TikTok launched an e-commerce business to sell goods made in China directly to US consumers from its mobile app.
The effort will see it operate warehouses in China, where it will store and ship domestically produced goods directly to customers.
In doing so, it will acquire the hugely successful but controversial Chinese online retailers Shein and Temu, which sell cheap clothing, toys, electronics and home goods.
But TikTok hopes to eclipse these companies by leveraging its existing user base and marketing directly to its more than one billion global users as they browse the app.
The new venture is separate from the company’s existing and somewhat failing TikTok Shop Shopping Center, which allows users and third parties to list their own items for sale on the platform, with TikTok acting as an intermediary.
Shein is the world’s largest ultra-fast-fashion brand, a multibillion-dollar Chinese company that is feared and envied in equal measure.
Shein is the world’s largest ultra-fast-fashion brand, a multibillion-dollar Chinese company that is feared and envied in equal measure. (Image: Anna Vakili attends the SHEIN VIP party at the Creamfields festival)
In July 2023, TikTok launched an e-commerce business to sell goods made in China directly to US consumers from its mobile app.
When the new venture launches, it will take on controversial Chinese online retailers Shein and Temu
Using teams of designers and complex algorithms that look for micro-trends on social media, it can have new styles on sale in less than a week. Shein posts more than 6,000 new products on its website every day.
In 2018, Shein’s annual sales were reportedly over 2 billion; Last year, shipments to more than 150 countries increased eightfold. According to financial analyst Bloomberg, the company is now valued at almost $70 billion.
The company is based in Singapore, but its suppliers are located in Guangzhou, a city 100 kilometers north of Hong Kong.
Shein is owned by Chinese entrepreneur Chris Xu, 39, a recluse who does not do interviews. Xu studied at Qingdao University of Science and Technology and founded Shein in 2008.
According to a 2021 analysis of the company by The Economist, Shein’s success can be attributed to “a turbocharged version of the fast-fashion formula of offering a constantly updated range of clothing at bargain prices.”