Amazon’s (NASDAQ:AMZN) “Haul” Challenges Temu with Ultra-Cheap Deals
Amazon (AMZN) is quickly rising to the competition posed by popular platforms like Temu (PDD) and Shein, when it comes to low-cost items imported from China. According to a CNBC report, two weeks before Black Friday, Amazon quietly introduced a new section in its mobile app called “Haul,” targeting budget-conscious shoppers with ultra-low-price items shipped directly from China.
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The e-commerce giant told CNBC that this initiative has already garnered millions of unique visits since its launch in November.
AMZN’s Haul Offers Low-Priced Items
Haul offers bargain-priced goods such as sneakers priced at $9.98 and phone cases for $2.99, with all items capped at $20. It also offers free shipping to orders over $25, and larger carts unlock steeper discounts, encouraging bulk purchases. However, unlike the speedy delivery offered by AMZN’s Prime membership program, Haul items take one to two weeks to arrive. This is because these items are shipped directly from China under the “de minimis” provision. This provision exempts goods under $800 from duties and taxes. However, this provision is facing rising federal scrutiny.
The report cited Neil Saunders, Managing Director of GlobalData Retail, who stated that Amazon’s strategic choice to keep Haul separate from its main site was “interesting”, as it prevented customers from “trading down” to lower-priced goods.
How Is Haul Offering Cheaper Items?
Haul and other platforms like Temu maintain low prices by leveraging their extensive China-based seller networks. Despite the longer shipping times, the trade-off appears acceptable to many Americans, as evidenced by Temu’s explosive growth and its position as Apple’s (AAPL) most downloaded free app for two consecutive years.
Meanwhile, Amazon plans to expand Haul’s offerings to hundreds of thousands of products across numerous categories, signaling its intent to challenge rivals while tapping into the booming low-cost market.
Is Amazon a Buy, Sell, or Hold?
Analysts remain bullish about AMZN stock, with a Strong Buy consensus rating based on 46 Buys and one Hold. Over the past year, AMZN has increased by more than 40%, and the average AMZN price target of $248.35 implies an upside potential of 10.5% from current levels.
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