Recently, Amazon announced that it will launch an end-to-end supply chain service fully managed by Amazon. The service will be available to all US sellers starting from the end of October and will expand to the global market by the end of this year. It integrates Amazon's existing AGL (Amazon Global Logistics), AWD (Amazon Inbound Distribution Network), and PCP (Cooperative Carrier Program). Sellers only need to provide detailed product information and pickup locations. Other aspects, such as product pickup, inventory consolidation, strategic replenishment, and last-mile delivery, will be taken over by Amazon.
Amazon stated that this new supply chain service fundamentally simplifies operations, optimizes inventory layout, and accelerates delivery speed, resulting in an average increase of 2% in seller sales. Through this service, sellers can shorten delivery time and save energy and expenses. In addition, sellers using this service will enjoy a 25% discount on AWD storage fees and a 15% discount on AWD shipping and handling costs.
Beyond the fully managed option, Amazon's supply chain service introduces multi-channel distribution (MCD), providing sellers with unified inventory management and allowing them to flexibly allocate inventory between different sales channels. Amazon predicts that this feature will save sellers 20% of their total inventory requirements and reduce capital usage.
From this series of operations, it is clear that Amazon cannot sit still in the face of Temu's impact. Although there is still a significant gap between Temu and Amazon in overall strength, independent data shows that Temu has achieved the "grand goal" of surpassing Amazon.
In August of this year, Temu had nearly 55 million downloads worldwide, an increase of 42% compared to the same period last year, surpassing Amazon. Temu's app has been downloaded over 735 million times globally, with monthly visits exceeding 500 million in Q1 2024. Last year, the Temu app was downloaded over 300 million times, 80% higher than Amazon's downloads. In the United States, Temu has made significant inroads, with over 200 million downloads accounting for 27% of its total downloads.
Despite this growth, Amazon's seller base continues to expand. As of now, 839,900 new sellers have joined Amazon's platform, with an average of about 3,700 new sellers added daily. It is expected that by the end of this year, the Amazon platform will add approximately 1.35 million new sellers. In cross-border e-commerce, Amazon remains the absolute leader, but it cannot ignore Temu's potential threat. After all, even Amazon CEO Andy Jassy acknowledges that Amazon's online retail business faces fierce competition from low-priced retailers like Temu.
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