Two weeks before Black Friday, Amazon We’ve quietly added a new section to the top of our mobile app. This place, called Haul, is a mobile-only space that mainly delivers ultra-low-priced items directly from China.
Haul is Amazon’s answer to the explosive popularity of apps like: PDD Holdings‘ Temu and fast fashion retailer Shein. Amazon told CNBC that Haul has recorded millions of unique customer visits since its launch in November.
Like Temu, Haul offers products at affordable prices, including sneakers for $9.98, kitchenware for $5.99, and phone cases for $2.99. Unlike Temu, Haul limits the price of each product to $20. We offer free shipping on orders over $25, and the discount gets bigger as your cart value increases. This encourages shoppers to purchase multiple items at once, hence the name Haul.
“One of the really interesting things Amazon has done is to completely separate this site 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 trading in low-cost products.”
The trade-off for lower prices is slower shipping. Prime members can typically expect 1-2 day delivery, while Haul items take 1-2 weeks to arrive. Amazon has been courting Chinese sellers for years, but typically acts as a middleman to pre-stock items in U.S. warehouses. This speeds up shipping and increases Amazon’s costs, which are passed on to consumers in the price of the item.
Haul and Temu rely on an existing network of China-based sellers to keep prices down by importing cheap individual items into the U.S. under minimum terms. This tariff exemption is under new scrutiny from the federal government, but currently allows importers to avoid paying duties and taxes on items worth less than $800.
This results in longer delivery times but lower prices. Considering Temu’s explosive growth since its U.S. launch in September 2022, it’s a trade-off that many Americans seem to be okay with. Temu is currently the most downloaded free app in the United States. apologizehas been launched in the App Store for the second year in a row.
“It’s not just about fighting Temu,” Saunders said. “It’s also about looking at opportunities in the lower end market, which has been growing very quickly across the entire retail sector over the last few years.”
Other low-cost e-commerce sites filled with Chinese goods have seen explosive growth in recent years. alibaba And the new TikTok Shop, with sellers flocking to it despite the potential ban.
All of this success has come despite public outcry over the environmental impact of its business model and labor practices by Shein and other companies that are said to violate human rights. Shein did not respond to CNBC’s request for comment.
According to a 2023 House of Commons report, some of Temu’s items came from China’s Xinjiang region, where forced labor has led to allegations of genocide against the Uyghur people. “We are committed to maintaining ethical, humane and legal business practices,” Temu told CNBC in a statement. “Our business partners and third-party merchants must adhere to strict standards regarding labor, safety and environmental protection.” He said.
Amazon is also under federal investigation into high injury rates at its warehouses, but the company says the report is fundamentally flawed. Additionally, a federal ruling last July determined that Amazon could be held liable for recalls of defective products.
None of this stopped sales figures from breaking records.
“Consumers don’t put their money where their mouth is. They say they don’t like the results of cheap products, but they still go and buy them in droves,” Saunders said.
Haul is only in beta, but demand appears to be outpacing supply. Some items at Haul are sold out during the Black Friday 50% off sale. Amazon told CNBC it will expand its selection to hundreds of thousands of items across dozens of categories in the coming weeks.
What does the future hold for Amazon Haul? Could impending political headwinds hamper the growth of the budget e-commerce sector? Watch the video above for more details.
