Amazon and Temu Copy Each Other in Battle for Sellers

Temu’s attempt to attract Amazon’s merchants has transformed the way both companies do business.

That’s according to a report Sunday (Oct. 6) by The Wall Street Journal (WSJ), which said Amazon has developed a new storefront that showcases the sort of lower-priced products found on Temu.

And Temu — which typically depends on shipping goods from China — has begun building local delivery capabilities and courting American brands and sellers with products stored stateside.

Jordan Berke, founder of retailer consultant Tomorrow, projected that more brands will make the switch to Temu.

“Sellers will jump at the chance to be able to diversify,” he said.

The report, citing data from Similarweb, noted that Temu has become the second-most-visited shopping site in the world next to Amazon, and it is one of the more popular in the U.S. WSJ also pointed to a projection from Emarketer showing Temu’s share of the American eCommerce market tripling from 0.7% in 2023 to 2.3% in 2025.

That’s still a fraction of Amazon’s roughly 40% share of the eCommerce space. But WSJ argued that Temu’s success represents one of the biggest challenges Amazon has faced in years, reminiscent of the way its rivalries with Walmart, eBay and Target forced it to reduce prices and make service and delivery improvements.

And sellers account for one of Amazon’s largest revenue sources, the report said, with the company making about $140 billion from fees for assisting sellers with needs such as logistics and account management.

Meanwhile, PYMNTS wrote last week about efforts by Amazon and Walmart to bolster their search capabilities with technology like generative artificial intelligence (GenAI) in an effort to increase consumers’ spending and loyalty.

For example, Amazon recently shared how new features are improving the visual search experience, including showing images to help users narrow down their query, and the ability to add text prompts to uploaded image searches and “More Like This” recommendations.

Walmart, for its part, is also adding new search functionality.

“For the retail giant, these innovations come alongside its push to grow its assortment, aiming to better compete with Amazon’s extensive reach through efforts such as expanding its marketplace offerings,” PYMNTS wrote. “With more products available, the retail giant has needed to improve consumers’ ability to find what they are looking for.”

These moves come as consumers are searching for user-friendly eCommerce journeys, with PYMNTS Intelligence research showing that 40% of shoppers weigh how easy to navigate a merchant’s online store is when deciding where to make digital purchases.