In a bid to counter the growing competition from budget retailer Temu, Amazon.com has asked some Chinese cross-border sellers to stop offering products at lower prices on the rival platform, according to the sellers.
Amazon’s local office in the US recently informed the managers of some of the top-selling Chinese brands that they are not allowed to list the same products at cheaper prices on Temu, the sellers said.
PRICE WAR: AMAZON REMOVES CHINESE SELLERS FROM FEATURED OFFER PROGRAM
This development comes as Amazon started monitoring product prices on Temu. Sellers who priced their products higher on Amazon compared to Temu have been removed from the Featured Offer program (also known as the “Buy Box”), according to a furniture seller on both platforms, who declined to be named out of fear of retaliation.
The Featured Offer program highlights products at the top of Amazon’s product pages, alongside the “Add to Cart” and “Buy Now” buttons, making it convenient for customers to purchase those products instead of the same ones from other sellers.
To qualify for this program, Amazon requires sellers to offer “competitive” prices, meaning they should not be higher than the lowest prices offered by major retailers outside of Amazon, according to the company’s policy.
Previously, Amazon had removed Temu from its price comparison system, as it believed that some sellers or products on the Chinese platform were untrustworthy or could be counterfeits, according to a Reuters report in 2023.
Amazon is engaged in a fierce battle to defend its domestic market share against challengers like Temu, fashion retailer Shein, and ByteDance’s TikTok Shop. These platforms have gained traction among US consumers with their low-priced offerings. Last month, Amazon launched Haul, a section within its app dedicated to selling products priced under $20.
An Amazon spokesperson asserted, “Sellers decide their selling strategies and set their product prices on Amazon. We do not ask them to set specific prices.”
“In addition to ensuring competitive prices, we highlight products that we think customers would choose if they compared all the options in detail.”
REACTION FROM CHINESE SELLERS
An employee of a Chinese brand selling on Amazon stated that hundreds of their products were removed from the Featured Offer program within just three days because the prices on Amazon were higher than on their Temu store.
To avoid further penalties, the brand changed the images associated with the remaining products on Temu. However, another seller doubted that this tactic would be effective.
Temu’s product suggestion algorithm prioritizes low-priced items, compelling sellers to list their products at the most affordable prices possible. For those who opt for Temu’s “full-service” option, where the platform operates the business on the seller’s behalf, product prices are determined by Temu itself.
“At Temu, we advocate for fair and transparent competition because it benefits consumers,” the company’s spokesperson said on Sunday. “Consumers win when sellers can offer their products on multiple platforms, providing more choices and better deals.”
INTENSIFYING MARKET COMPETITION
Rumors about Amazon pressuring Chinese sellers to exclusively sell on its platform surfaced last week, following Anker’s decision to remove its products from Temu. Anker is a well-known brand for power banks and charging accessories.
As of Monday, Anker’s official store on Temu’s US marketplace no longer listed any products, with the last buyer review posted on Sunday. Previously, the store offered over 40 products at its launch, according to Chinese media reports in July. Another Anker store on Temu in the US, selling used products, was also cleared out, with the last review posted on Monday.
However, Anker’s store on Temu in Germany remains operational, listing 18 products.
Anker did not respond to a request for comment. Amazon had previously promoted Anker as a success story of a startup brand on its platform.
Launched in 2022, Temu quickly rose as a formidable challenger to larger platforms. According to data from Similarweb in November, it is the third most visited online marketplace globally, following Amazon and Alibaba’s AliExpress.
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