Amazon Is Panicking After Losing 2M Customers To Chinese Rivals Temu And Shein Since January

Global e-commerce giant, Amazon, is currently enduring somewhat of a challenging period as the company has seen its customer figures drop by over two million recently.

This marginal decline comes as its Chinese-based competitors, Temu and Shein, have gathered a stronger hold internationally since expanding. The two online retailers ship out products directly from China and have already developed a strong presence in the British and American online retail market.

Both of the Chinese companies are known for selling more affordable and cheaper items than Amazon. The two represent the biggest challenge to Amazon right now in the online shopping market, with Walmart and Target previously being of concern to the American e-commerce company.

Temu first became available to people in the United States in September 2022, and according to The Wall Street Journal, the company's user base reached 51.4 million in January of this year. Furthermore, findings from SimilarWeb revealed that 152 million people in the US use the company's services each month.

Shein, who are headquartered in Singapore, grew its number of customers from 20.9 million to 26 million within that same 16-month timeframe that Temu experienced large growth.

Whilst Amazon remained ahead of the two Chinese outlets with 67 million users when the figures released in January, this was a drop from the 69.6 million customers that the company had in September 2022.

The loss of 2.6 million customers is a major deal for Amazon, and to regain its dominance in the online shopping sector, the organisation is reportedly looking to focus on customer trust and fast deliveries.

The American organisation is putting together plans that will promote its efficiency and reliability when it comes to the company's level of service. Also, Amazon want to increase the number of same-day deliveries they can manage.

Staff are currently at work on how they can have more items available for same-day shipping, particularly in highly popular departments, such as electronics.

In 2023, Amazon made it clear that they reign at the very top when it comes to appeasing customers with purchases right away. This is as more than four billion bought products were delivered on the same or following day to Prime members in the United States.

Co-founder of Consumer Intelligence Research Partners, Josh Lowitz, spoke on the advantage amazon still possesses in the retail landscape. He told the WSJ: "Amazon's logistics are unapproachable. You have to have a whole lot of volume to justify the infrastructure Amazon has, so it's going to take a long time for anyone to compete with Amazon on reliable convenience."

Temu and Shein are popular to a large number of people because of its cheaper prices, and therefore appear to be appealing to a slightly different market to Amazon. Amazon users are satisfied with paying a premium price for quicker deliveries, whilst Temu and Shein customers are fine with waiting longer for their purchased items to arrive and may not worry about product quality as much.

If Amazon's two newest competitors continue to be of interest to customers in major markets such as the US through cheaper pricing, the company could gradually slip up further when it comes to user bases as it will not drop down to the lower costs of its rivals.

Ultimately, Amazon will need to keep maintaining its reliability when it comes to fast shipping and deliveries as that is one aspect where it massively dominates and has the clear edge over Temu and Shein, or anyone else in the e-commerce sector.