Two weeks before Black Friday, Amazon It quietly added a new section to the top of its mobile app. Called Haul, it's a mobile-only area for very low-priced items, mainly shipped directly from China.
Haul is Amazon's answer to the growing popularity of apps like PDD Holding'Temu and fast fashion retailer Shein. Amazon told CNBC that Haul has had millions of unique customer visits since its launch in November.
He loves sinceHaul offers bargain-priced items, such as sneakers for $9.98, kitchen utensils for $5.99 and phone cases for $2.99. Unlike Timo, Hall price caps From each offer at $20. It offers free shipping on orders over $25 and increasingly deep discounts as your cart value goes up. This encourages shoppers to purchase several items at once, hence the name Haul.
“One of the interesting things Amazon has done is make this completely separate from the main Amazon site,” said Neil Saunders, managing director of GlobalData Retail. “Now, there's a logic to doing that: They don't want consumers to trade low-priced goods.”
The trade-off comes with cheaper prices and slower charging speeds. Instead of the one- or two-day shipping typically available to Prime members, items on Haul take one to two weeks to arrive. While Amazon has courted Chinese sellers for years, it typically acts as an intermediary, stocking items in American warehouses in advance. This enhances shipping speeds, as well as costs to Amazon, which are passed on to the consumer in the price of the product.
Haul and Temu keep prices low by relying on their existing network of China-based sellers to import cheap individual items into the United States under the sanctions law. Minimum saving. Although this customs exemption faces Renewed federal auditIt currently allows importers to avoid paying duties and taxes on items worth less than $800.
This results in longer shipping times but lower prices. It's a trade-off that many Americans seem to be OK with, given Temu's explosive growth since its US launch in September 2022. It's now the perfect solution. Most downloaded free app in appleApp Store for two years in a row.
“It's not just about fighting Timo,” Saunders said. “It's also about looking at the opportunities in this low-priced part of the market, which has been growing very rapidly across the entire retail range over the last couple of years.”
Other low-cost e-commerce sites stocked with Chinese goods have seen explosive growth in recent years, including… Alibaba And newcomer TikTok Shop, which Sellers are flocking in despite a potential ban.
All of this success has occurred despite popular protests against the environmental impacts of the business model and labor practices By Shane And other companies that are said to be violating human rights. Shein did not respond to CNBC's request for comment.
In 2023, the House of Representatives a report Some of the items in Temu were found to come from China's Xinjiang region, where forced labor has led to accusations of genocide against the Uyghur people. In a statement, Timo told CNBC that she is “committed to upholding ethical, humane and legal business practices” and that “business partners and third-party merchants must adhere to strict standards related to labor, safety and environmental protection.”
Amazon as well Under investigation by the federal government for high infection rates at its warehouses, although Amazon subpoenaed the report Fundamentally flawed. In addition, A Federal rule In July, it was determined that Amazon could be held liable for recalls of defective goods.
None of this has stopped the sales numbers Of breaking records.
“Consumers aren't putting their money where their mouth is. They say they don't like the consequences of cheap products, but they're still buying them in droves,” Saunders said.
While Haul is only in beta, Demand appears to exceed supply. During the 50% Black Friday sale, Haul sold a few items. Amazon told CNBC it is expanding its selection to include hundreds of thousands of items across dozens of categories in the coming weeks.
What does the future hold for Amazon Hall? Could looming political headwinds hold back e-commerce growth in the budget? Watch the video above to learn more.
