By Sabrina Escobar
Move over, Shein and Temu, there's a new sheriff in town: Haul, the new discount storefront launched by Amazon.com.
Amazon shoppers are now able to browse through an eclectic assortment of products, all priced at $20 or less, directly on Amazon's app or mobile browsing site.
The initiative is Amazon's clap-back to the success of Chinese-founded e-commerce companies, like Shein and Temu, owned by PDD Holdings. These companies have been gradually nibbling away at the market share of many American retailers since they burst onto the scene following the pandemic, a trend Barron's pointed out last year .
Indeed, anyone who has ever scrolled through Shein or Temu might feel a striking sense of déjà vu when they open Amazon Haul. The prices are similar, as is the range of products and the overall layout of the website. A pricing comparison of 10 similar products across Haul, Temu, and Amazon suggests Haul's pricing is in line with Temu, and both Haul and Temu's prices are lower than the core Amazon storefronts, wrote Citi analyst Ronald Josey in a note Friday.
Amazon has one big advantage over both upstarts: a pre-existing, exceedingly loyal customer base that some estimates say ranges in the hundreds of millions in the U.S. alone.
"The integration into Amazon's core app (and awareness) is likely to be a key differentiator to demand," Josey wrote. He rates Amazon stock a Buy.
If you're one of those shoppers and are considering dabbling in Haul yourself, here are a few things you should know.
What Does Haul Sell?
Pretty much anything. A quick scroll through the app turns up a $2.99 pillow cover, a faux-pearl bracelet retailing for $1.99, a $3 phone cover, a $10 racerback T-shirt, and a $3.99 black tie -- among hundreds of other trinkets. The store's categories include women's and men's clothing, accessories, kitchen utensils, office supplies, home improvement products, and sporting goods.
How Do I Use Haul?
Amazon Haul is currently rolling out in beta testing in the U.S. and is available only on mobile phones. To access Haul, customers can either navigate to www.amazon.com/haul on their mobile device or update their Amazon shopping apps. Once the app is updated, they can get on the Haul storefront by searching "Haul" in the search bar or navigating to it from the main menu icon.
What's the Catch?
Delivery will take a bit longer than what most Amazon customers are used to. The typical delivery time for Haul products is one to two weeks, the company said -- a timeline more similar to Shein and Temu's than Amazon's typical same-day or two-day delivery policy.
"We (...) hear from customers that sometimes they would love to shop ultra-low-priced products even if some of them take one to two weeks to arrive," Amazon said.
That might be true. The success of Shein and Temu is a testament to how many shoppers are willing to trade speed for lower prices. The question for Amazon is whether its shoppers, who have grown to expect some of the fastest delivery service in the business, will be equally as patient.
Another adjustment for loyal Amazon users is that shipping won't necessarily be free. Orders $25 and over will enjoy the perk of free shipping, but anything under that threshold will incur a $3.99 delivery fee regardless of whether you have a Prime membership.
Can I Return the Products?
Amazon offers free returns on all purchases over $3 within 15 days of delivery, allowing shoppers to drop off the goods at more than 8,000 drop-off locations across the U.S.
Where Is All This Cheap Stuff Coming From?
This is another area where Amazon is taking a page from the Shein handbook.
Amazon Haul sellers will ship products to a fulfillment center operated by third-party logistics providers that already work with Amazon located in China's Guangdong Province. Those products will then be shipped to consumers straight from the fulfillment center in China.
That means that, like Shein and Temu, many of the shipments will be able to be delivered to consumers using the now-maligned de minimis provision, which lets packages shipped from abroad valued at less than $800 enter the U.S. tariff-free.
The provision, meant to simplify customs procedures for small businesses and consumers, has come under scrutiny lately as legislators argue that it has turned into a loophole that allows some e-commerce companies to evade paying tariffs on imported goods. There are several bills snaking their way through Congress aimed at closing the so-called loophole.
Amazon said it would adapt its process as necessary if import rules change to remain compliant with customs requirements. It also emphasized that it screens the product sellers on Haul to make sure the listed products are "safe, authentic, and compliant with applicable regulations."
Amazon plans to expand its fulfillment capabilities for Haul in the future.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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November 15, 2024 10:14 ET (15:14 GMT)
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