👉 Background: Amazon started as an online bookstore but now is the world’s largest e-commerce company, with more than $700 billion USD worth of goods sold in 2023 by Amazon and its sellers. But, over the past 6 years, Temu and Shein have spoiled the Zon's party by offering scarily cheap pricing on similar products.

👉 What happened: Amazon has now launched a new online store called Amazon Haul with heavily discounted items to compete with Temu and Shein. It has even designed the site to mimic Shein and Temu with emojis like rocket ships to show low prices or fire to show urgency.

👉 What else: Unlike Amazon’s traditional 1-day delivery times, Amazon Haul has slower shipping, but they claim this is responding to customer demand for ultra-low priced goods. Lower prices and slower delivery could open up a whole new market segment for Amazon.

What's the key learning?

💡Market segmentation is where a business creates unique offerings to target different customer groups. And for Amazon, it is ultimately segmenting their customers in cost vs speed buyers.

💡By offering ultra-low-cost items with slower shipping times, Amazon is appealing to price-sensitive shoppers, particularly younger consumers who are currently shopping on platforms like Temu and Shein.

💡A study by eMarketer revealed that 44% of US Gen Z-ers make at least one purchase on Shein monthly, while 41% do the same on Temu. So for Amazon, the key to success will be its ability to differentiate Amazon Haul from its standard offering.