December 23, 2024
Amazon.com has asked some Chinese cross-border merchants to stop offering goods at a cheaper price on rival platform Temu , according to several sellers, amid intensifying competition from the aggressive budget retailer owned by mainland e-commerce giant PDD Holdings .
The local office of US-based Amazon recently informed the managers of some top-selling Chinese brands that they should not list identical items at a lower price on Temu, merchants said.
It comes after the US retailer started tracking product pricing on Temu. Sellers whose Amazon listings were found to be more expensive were kicked out of the Amazon Featured Offer programme, according to a merchant who sells furniture on both platforms and declined to be identified for fear of reprisal.
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A Featured Offer, also known as the Buy Box, is prominently displayed at the top of an Amazon product page, alongside the "Add to Cart" and "Buy Now" buttons, making it easier for customers to purchase the featured item rather than the same product sold by other merchants.
The Temu site features low-priced items shipped directly from China. Photo: AP Photo alt=The Temu site features low-priced items shipped directly from China. Photo: AP Photo>
To be eligible for the programme, sellers need to set a "competitive" price for their item, "meaning it's less than or equal to the lowest price from major retailers outside Amazon", according to the company.
Amazon had previously excluded Temu from its price comparison system, as the US firm considered some merchants or products on the Chinese-backed platform to be questionable or counterfeits, according to a report from Reuters in 2023.
The US e-commerce giant has been facing an uphill battle to protect its home turf against the likes of Temu, fast-fashion site Shein and ByteDance's TikTok Shop, whose bargain offerings have won over many US consumers . Last month, Amazon launched Haul, an app section that sells goods priced under US$20.
An Amazon representative said on Tuesday that "sellers decide their selling strategy and set their own product prices in the Amazon store, and Amazon does not ask them to set certain prices."
"In addition to ensuring competitive pricing, we highlight the offer that we think customers would choose if they compared all offers in detail."
A person who works for a Chinese brand selling on Amazon said hundreds of its items were ejected from the Featured Offer programme in three days because they were priced above the benchmarks quoted by the platform, which appeared to be prices found on the brand's Temu store.
In an effort to avoid further penalties, that merchant changed the pictures attached to its remaining listings on Temu. However, another seller was sceptical that this method would work.
An Amazon booth at a Chinese import expo in Shanghai. Photo: EPA-EFE alt=An Amazon booth at a Chinese import expo in Shanghai. Photo: EPA-EFE>
Temu's recommendation algorithm gives lower-priced products more visibility, driving sellers to list their items as cheap as possible. For merchants who opt for the site's so-called full-custody service, which handles much of the operational responsibilities of running an e-commerce business, product prices are set by Temu.
"At Temu, we support fair and open competition because it's good for consumers," a company representative said on Sunday. "Consumers win when sellers can offer their products on different platforms, giving people more choices and better options."
Rumours about Amazon pressuring Chinese sellers to list exclusively on its platform surfaced last week after Anker, a popular brand selling power banks and charging accessories, scrapped its listings on Temu.
As of Monday, the official Anker store on Temu's US marketplace had no product listings, while the last buyer review was posted on Sunday. The shop had more than 40 items when it opened, according to Chinese media reports in July. Another US Anker store on Temu selling refurbished goods was also cleared, with the last buyer review posted on Monday.
However, Anker's German store on Temu remains operational with 18 items listed.
Anker did not respond to a request for comment on Monday. Amazon previously marketed the Changsha, Hunan province-based company as a case of a start-up brand finding business success on the e-commerce site.
Launched in 2022, Temu has quickly emerged as a challenger to more established players globally. It was the world's third-most-visited online marketplace after Amazon and Alibaba Group Holding's AliExpress, according to November data from Similarweb. Alibaba owns the South China Morning Post.
This article originally appeared in the South China Morning Post (SCMP) , the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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