Amazon.com (NASDAQ: AMZN) has reason to worry about China-based competitor Temu. Temu will be the most downloaded app in Apple’s App Store in 2024. Amazon was not even in the top 10. Temu held the same position in 2023.
Temu has a massive e-commerce business. Launched in 2022, it is owned by Chinese company PDD Holdings. It sells huge numbers of products at ultra-low prices. These are made in China and, in most cases, shipped to other countries.
Amazon has launched a Temu competitor. Called “Haul,” it is part of Amazon’s mobile site. According to CNBC, “Like Temu, Haul offers items at bargain prices, such as sneakers for $9.98, kitchenware for $5.99 and phone cases for $2.99.” It also offers free shipping, even for many small orders. One guess about why it is not part of Amazon.com is that Amazon does not want people to move from its main site to one with cheaper products.
Amazon may not need to win the battle with Temu with more significant discounts. Congress has already found that Temu may have several human rights violations. Additionally, in an 11-page report, the Congress’s Select Committee on The Chinese Communist Party found that “The overwhelming volume of small packages and lack of actionable data limit CBP’s (U.S. Customs and Border Protection) ability to identify and interdict high-risk shipments that may contain narcotics, merchandise that poses a risk to public safety, counterfeits, or other contraband.”
Another concern about Temu is similar to concerns about TikTok. China may use Temu to spy on Americans via their smartphones. Apple (NASDAQ: AAPL) and Google Play investigated the Temu app.
Amazon may not have to fight Temu on the price points of products. The government may hobble Temu’s activity or push it out of the US market entirely.
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