For as long as I can remember, Amazon has been the undisputed heavyweight champ of e-commerce, taking down competitors like Mike Tyson in his prime. 

(Source: Business Insider)

Well, now after nearly 30 years of dominance, it looks like Jeff Bezos and his crew have finally found themselves in a real fight.So who are the contenders? None other than Temu and Shein—two scrappy upstarts from China that middle class America can’t seem to get enough of.

In a move that screams, “if you can’t beat ‘em, join ‘em,” Amazon is reportedly launching a discount store to take on its new Chinese rivals. The e-commerce giant, which has criticized Temu’s ultra-low prices in the past—even going so far as to remove them from its price-searching algorithm—is now deciding to play copycat. I guess he’s been hanging out with Zuckerberg lately.

Even if you haven’t bought a cheap Chinese product from Temu or Shein, you’ve probably noticed how these two companies are gaining ground on the world’s most powerful retailer. Their rock-bottom prices on everything from $5 pajama sets to $10 drones are hard to miss. Temu, owned by the Chinese e-commerce group PDD Holdings, has been dishing out bargains like Oprah giving away cars in the early 2000s—“You get a car! You get a car! Everybody gets a car!” And it’s working. I can’t be the only one getting non-stop golfing ads from Temu.

All jokes aside, the numbers don’t lie. Temu is set to boost its third-party sales by a mind boggling 60% next year, pulling in over $30 billion. That’s definitely enough to make Amazon a bit nervous, even though they’re still the top dog with over $360 billion in sales expected from independent sellers by 2025. But while Amazon’s growth has been a steady long road to get to this point, Temu has only been around two years.

So what’s Amazon’s game plan? They’re launching a new storefront focused on low-cost fashion and lifestyle products, shipping directly from China. Yes, you heard that right. The company that made two-day shipping a thing is now asking customers to wait nine to eleven days for their packages. But hey, at least it’ll be cheap, right?

(Source: The Sydney Morning Herald)

This new venture marks a significant shift from Amazon’s traditional model, where products were shipped to U.S. warehouses before being delivered to your doorstep (or, more accurately, to your wife, because let’s be honest, who’s really doing all that Amazon shopping?).

You’d think Wall Street would be nodding their heads in agreement, but analysts aren’t exactly sold on the idea. They’re warning that Amazon’s dive into the bargain bin could ignite a “race to the bottom,” where profit margins get dangerously slim. Temu and Shein have built their empires on razor-thin margins, something Amazon might find tough to replicate without taking a serious hit to their bottom line.

The only hurdle isn’t just undercutting the competition on price. Amazon is also trying to court Chinese sellers—the same sellers who’ve been making a killing on Temu and Shein. The e-commerce giant knows that if these sellers jump ship, they’ll take their business (and their ad dollars) with them. And let’s be real, Amazon isn’t exactly in the habit of letting money walk out the door.

So, is Amazon running scared? Maybe. But in my opinion, Bezos and his leadership team are just being smart. Temu and Shein have proven they aren’t just passing fads—they’re real contenders. If Amazon wants to stay on top, it’s going to have to put up a fight.

Stock.News has positions in Amazon.