Any strategy that works is possibly the right strategy, they say. Yes, in this age, we need to understand what matters, and not the fixation that highest quality, premium branding, etc, will deliver alpha. That construct remains of course, but you should not count on it all the time.
Amazon, in a bid to battle fast-charging Temu, is going to distribute no-branding cheap Chinese products, possibly made within environments it has criticized in the past. Why not? If it does not do that, it may be out of business in this decade. Temu is scaling over America, and Amazon cannot just live on a fool’s purity that customers care about quality, if that should come with the whole paycheck, when Temu is so cheap that you wonder if it is a charity!
So, Amazon has a plan: “Amazon is set to launch a new section on its site dedicated to low-priced fashion and lifestyle items shipped directly from Chinese sellers to U.S. consumers. This development, announced at an invite-only conference for Chinese sellers, underscores Amazon’s most determined effort to date to combat the rising competition from e-commerce giants Temu and Shein, both of which are closely linked to China.”
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This development highlights the increasing influence of Chinese products in the global market. Despite U.S. restrictions and tariffs on Chinese goods and services, Chinese products have become a top choice for American consumers due to their low cost. This trend underlines the competitive pricing and efficiency of Chinese manufacturing and logistics, which continue to dominate even amidst geopolitical tensions and trade barriers.
Amazon’s new initiative not only showcases the company’s adaptability and strategic planning but also brings to light a significant challenge for the U.S. economy: the high cost of domestic goods and services. The growing preference for affordable Chinese products among American consumers underscores the need for the U.S. to address these cost disparities. Domestic producers are pressured to find ways to reduce production costs and improve efficiency to compete effectively with low-cost imports.
Expect changes in the US ecommerce market as this Amazon’s “new section” could overtime become the main section, and the current section will move to the side, because Temu is not going to sleep.
Welcome Amazon to what I have called product Minimum Viable Quality (MVQ) and which China has perfected for the global market. MVQ is that version of a new product which allows a team to sell the maximum amount of products to customers with the least effort and at the best optimized price even when delivering value. Lesson: quality without the construct of affordability means nothing. #GameOn
Amazon Plans to Win More Retail Market Shares with Cheap Chinese Goods
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