What: Amazon plans to beat Shein and Temu at their own game.

Why it is important: The great decoupling is taking place, with online behemoths only focused on the economic race, while other retailers are pressurized to operate sustainably.

Amazon is set to launch a new service shipping inexpensive fashion and household items directly from China to the U.S., a move aimed at competing with low-cost e-commerce platforms like Temu and Shein. This service will enable delivery from China to U.S. consumers in nine to 11 days, a change from the current practice of routing through U.S. warehouses. The service will focus on unbranded products such as phone cases and household tools.

The strategy represents a shift in Amazon's operational model, traditionally known for fast delivery and easy returns, as it adapts to the competitive pressures from Temu and Shein, who leverage the U.S. statute allowing tax-free entry for shipments under $800. These platforms have gained significant market traction, with Temu recently becoming the most downloaded free app in the U.S. Apple Store, underscoring their rapid expansion and threat to Amazon's market dominance.

Amazon's response also includes efforts to enhance visibility and accessibility of its bargain items, with initiatives like lowering seller fees for inexpensive apparel and boosting the selection of products available for same-day delivery. This strategic pivot is designed to maintain its competitive edge by matching the supply chain efficiencies that have fueled the success of its rivals.

Amazon takes on Chinese rivals Temu and Shein with plans for new discount service