During Black Friday, countless Amazon sellers found themselves glued to their dashboards, silently wondering: "How much business has Temu stolen from me?" This concern likely weighs heavier on cross-border e-commerce operators than debates about whether the U.S. economy might slip into stagflation.
Economic downturns often breed new business opportunities, as evidenced by brands like Pepsi and Procter & Gamble that rose to prominence during the Great Depression through low-price strategies and targeted marketing. Temu's emergence appears similarly timed. But what is the actual impact of Temu's Black Friday campaign on Amazon sellers? This analysis examines three key dimensions: product structure, pricing advantages, and consumer psychology.
1. Product Structure: Complementary Competition or Emerging Threat?
Temu has rapidly attracted U.S. consumers with "90% OFF" promotions, frequently topping App Store shopping rankings and directly challenging Amazon and SHEIN. During Black Friday, Temu's homepage featured constant flash sales with 70% discounts, free shipping, and 90-day return policies.
Consider a 300ml essential oil diffuser sold on Temu for $5.48 with free shipping. While attractively priced, it represents the lower end of the market, using cotton wick diffusion technology. Most top-selling diffusers on Temu fall under $20.
Amazon tells a different story. Searching "Essential Oil Diffuser" reveals an average price of $29 among the first 200 listings, with most products offering 500ml+ capacity, wick-free operation, and multiple mist modes - catering to consumers prioritizing quality and functionality.
Key Findings:
- Temu focuses on entry-level, price-sensitive products
- Amazon dominates mid-to-high-end functional products
- The platforms currently serve different consumer segments
While direct competition appears limited currently, Temu's pricing could erode Amazon's price-sensitive customer base. Future expansion into mid-range products might increase competitive pressure.
2. Pricing Advantage: Sustainable Strategy or Temporary Edge?
Temu's initial growth relied heavily on subsidies and aggressive marketing - a model difficult to sustain long-term. As subsidies decrease and traffic growth slows, maintaining price advantages becomes challenging. Without platform support, suppliers face increasing financial pressures.
Consider air fryer parchment paper: 100 sheets sell for $4.99 on Temu (originally $14.99) versus $9.99 on Amazon (originally $19.99). The price gap narrows significantly outside promotional periods.
Amazon has responded with initiatives like its Small and Light program , reducing fulfillment costs for compact, inexpensive items - directly countering Temu's focus on lightweight goods.
Key Findings:
- Temu's pricing depends on unsustainable subsidies
- Amazon adapts through operational efficiencies
- Future competition will hinge on supply chain management
3. Consumer Psychology: Amazon's "Traffic Siphon Effect"
Amazon has evolved beyond an e-commerce platform into a powerful product search engine. Even when consumers discover products through Google, social media, or video platforms, they frequently complete purchases on Amazon - especially during major sales events.
Sellers operating both standalone sites and Amazon stores report that customers often verify product availability on Amazon before purchasing elsewhere, demonstrating Amazon's entrenched consumer trust.
Key Findings:
- Amazon benefits from strong brand recognition and trust
- Temu requires significant investment to alter shopping habits
- The platforms currently operate at different maturity levels
4. Strategic Responses for Amazon Sellers
Temu's emergence provides Amazon sellers with valuable market intelligence. By analyzing Temu's product offerings, sellers can identify market segments to avoid and focus on differentiated products.
Approximately 80% of Temu's flash sale items have identical or similar counterparts on 1688.com, often with identical product images. Competing directly on price while maintaining profitability proves extremely difficult.
Effective strategies include:
- Modifying successful existing products through feature combinations
- Researching supply chains for improved versions of popular items
- Analyzing competitors' product development approaches
- Monitoring supply and demand dynamics for informed decisions
For example, a 500ml wood-grain diffuser might cost $6 to source, selling for $30 on Amazon with 40% margins. Even smaller 300ml versions maintain similar profitability when properly positioned.
Successful sellers study competitors' product evolution, including horizontal innovation (variations for similar use cases) and vertical extension (adapting features for new scenarios).
Temu's rise presents both challenges and opportunities for Amazon sellers. By focusing on product differentiation, supply chain optimization, and brand development, sellers can maintain competitiveness in an evolving marketplace.