Amazon.com Inc (NASDAQ: AMZN) is reportedly preparing to launch a new section on its shopping site, targeting overseas consumers with affordable items shipped directly from warehouses in China.
This strategic move is aimed to compete with bargain sites like Temu (NASDAQ: PDD) and Shein, reported Reuters.
The upcoming marketplace will feature unbranded fashion, home goods, and daily necessities, promising delivery times of 9 to 11 days.
In a recent closed-door meeting, Amazon informed Chinese sellers that it would start signing up merchants this summer and begin accepting inventory in the fall, per the report, which cited the Information.
Sellers on this new platform can select their product offerings, set their own prices, and produce in small batches to test market demand.
"We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices, and greater convenience," an Amazon spokesperson said, per the report.
It remains unclear if Amazon will utilize a U.S. trade provision that exempts individual packages valued at less than $800 from customs duties.
Both Shein, which is expanding ahead of a public offering, and Temu, owned by PDD Holdings Inc, benefit from this expedited clearance process for direct-to-consumer shipments.
Amazon stock has gained 50% in the last 12 months. Investors can gain exposure to the stock via Consumer Discretionary Select Sector SPDR Fund (NYSE: XLY) and Vanguard Consumer Discretionary ETF (NYSE: VCR).
Price Action: AMZN shares closed higher by 3.90% at $193.61 on Wednesday.