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Amazon courts sellers at China summit as Temu and Shein gain momentum

Amazon recently held a summit for China-based merchants, a significant segment of its third-party marketplace.

Amazon courts sellers at China summit as Temu and Shein gain momentum

In response to intensifying competition from Chinese online retail challengers Shein and Temu, Amazon unveiled plans for a new "innovation center" in Shenzhen, a city recognized as China's Silicon Valley.

The conference, spanning from Tuesday to Friday, showcased Amazon's commitment to supporting sellers in the Asia-Pacific region. The innovation center aims to assist sellers in product launches, brand building, and digitization. Chinese sellers are also gaining access to Amazon's end-to-end supply chain service, streamlining the process from factory to replenishment on various platforms in a single transaction.

Despite Amazon's withdrawal from the Chinese market, the country remains a focal point for businesses aiming to reach Amazon's global customer base. In 2023, Amazon reported a growth of over 20% in the number of items sold by Chinese sellers on its platform, with a 30% increase in Chinese sellers achieving sales exceeding $10 million.

Amazon faces formidable competition from Shein, which recently filed for a confidential IPO in the U.S. Although Shein moved its headquarters to Singapore in the previous year, it continues to be a significant player in the Chinese market. Temu, owned by Chinese tech giant PDD Holdings, poses another challenge with its diverse range of goods and increased advertising presence.

In response to this competition, Amazon adjusted its fees for sellers, particularly in the clothing category, reducing the commission on items priced below $15. This strategic move appears to target Shein and Temu merchants and demonstrates Amazon's adaptability in a fiercely contested market.

Etsy, known for its handmade and artisan products, acknowledged the impact of Shein and Temu on market share. Etsy CEO Josh Silverman noted that these competitors are focused on offering cheap goods at lower prices, emphasizing Etsy's commitment to providing meaningful alternatives that resonate with consumers. Meanwhile, Etsy announced a reduction in its workforce, reflecting the challenges posed by the evolving e-commerce landscape.