What: Amazon cuts referral and fulfilment fees for European sellers in response to aggressive pricing from Shein and Temu.

Why it is important: This move reflects how established platforms are adapting to disruptive pricing models from new entrants.

Amazon is implementing significant fee reductions for its European sellers, targeting categories such as fashion, homeware, and accessories, in a strategic response to mounting competition from low-cost marketplaces like Shein and Temu. The new structure lowers referral fees on clothing and accessories to 5% for items priced up to 15 euros or pounds, and to 10% for items between 15 and 20 euros or pounds, with further reductions planned for home products, pet clothing, grocery, and vitamins. These changes, effective from mid-December, are among Amazon’s largest ever fee cuts and are designed to help sellers remain competitive as Shein and Temu continue to gain market share with ultra-low prices and attractive seller incentives. Amazon’s operational improvements and cost-saving innovations are enabling these fee reductions, which also include lower fulfilment fees across major European markets. This strategic adjustment underscores the evolving dynamics of European ecommerce, where established giants are compelled to innovate and adapt in the face of disruptive, fast-growing rivals

IADS Notes: Amazon’s decision to cut seller fees in Europe is a direct response to the intensifying competition from ultra-low-cost platforms like Shein and Temu, whose aggressive pricing and rapid market penetration have disrupted established retail hierarchies across multiple regions. As regulatory changes in the US forced Shein and Temu to pivot their focus to Europe in mid-2025, Amazon strategically expanded its Haul service and adjusted its fee structure to maintain its dominance and appeal to price-sensitive sellers and consumers (June 2025, Financial Times). The competitive landscape has been further shaped by Shein and Temu’s ability to capture significant market share through digital-first strategies, as seen in their success in South Africa and their growing influence in Europe (August 2025, Inside Retail). This disruption has compelled traditional and local retailers to adapt by emphasising curation, agility, and differentiated value propositions (November 2025, Inside Retail). Meanwhile, European authorities have responded to these shifts with new compliance measures and fees, aiming to level the playing field and address the challenges posed by innovative business models and regulatory loopholes (August 2025, GDI). Temu’s Consumer-to-Manufacturer model, which underpins its rock-bottom pricing, exemplifies the kind of supply chain innovation that is driving this new era of retail competition, even as regulatory scrutiny increases (March 2025, The Diplomat).

Amazon cuts seller fees in Europe in Shein, Temu price war