Amazon launches a $20 discount store in a challenge to Temu and Shein

Late last month, we covered Amazon’s plans to launch a budget-friendly storefront with a $20 price cap to compete with bargain sites like Temu and Shein. Just two weeks later, Amazon has rolled out its new discount store, offering everything under $20.

This new section, dubbed “Amazon Haul,” offers an array of affordable options across categories like apparel, home goods, and electronics. Accessible through Amazon’s mobile app, it promises “crazy low prices” on items like $1 eyelash curlers, $3 nail dryers, and oven mitts. Free shipping is available on orders over $25, while smaller orders carry a $3.99 shipping fee. Amazon hasn’t commented on the launch at this time.

Earlier this year, CNBC reported that Amazon planned to open a discount-focused platform featuring products shipped directly from China. In July, The Information added that Amazon shared this initiative with Chinese sellers, outlining plans to stock inexpensive essentials such as phone cases, massage tools, and clothing. The site is expected to go live this fall, with delivery times extending from 9 to 11 days—longer than Amazon’s standard delivery options.

Amazon is counting on consumers who are willing to trade faster shipping for lower prices. Most items in Amazon Haul are expected to arrive within two weeks, though exact shipping times vary depending on the delivery location.

This approach marks a shift for Amazon, which has established itself as a leader in fast delivery. The company changed the game with free two-day delivery and has since accelerated its options to include same-day and next-day delivery, with some areas even offering a few-hour turnaround.

Despite its 30-year history and approximately $575 billion in annual net sales, Amazon faces growing competition from younger e-commerce players, especially China-based companies like Temu and SHEIN, whose low prices are drawing in new shoppers worldwide.

Temu’s Rapid Growth

Temu, which entered the U.S. market in September 2022, quickly became a major player. In 2023, it was the most downloaded app in the U.S., amassing 103 million downloads—nearly double that of TikTok.

Headquartered in Boston, Temu has expanded into 22 countries, including key European markets such as France, Germany, and the UK. The app has also topped download charts in these regions, reflecting its growing global presence.

Temu is owned by Pinduoduo, a Chinese e-commerce company founded in 2015 by former Google employee Colin Huang. Often compared to a blend of “Costco and Disneyland,” Pinduoduo went public in 2018, raising around $24 billion and gaining backing from Tencent and Sequoia Capital.

With Amazon’s low-price section set to launch soon, the competition between the e-commerce giants is heating up, signaling a potential shift in the landscape as Amazon takes on its low-cost rivals.