According to Amazon, Temu, an eCommerce marketplace that launched in September, does not meet its strict qualification requirements for Amazon’s fair pricing policy. — Reuters
NEW YORK: Amazon is excluding its new competitor Temu from its price searching algorithm that checks if products sold on its platform are competitive with rivals, saying the site doesn’t meet its standards.
According to Amazon, Temu, an eCommerce marketplace that launched in September, does not meet its strict qualification requirements for Amazon’s fair pricing policy.
That means some low-priced general merchandise on Temu, owned by PDD Holdings, could beat out prices offered by Amazon’s marketplace sellers.
The pricing algorithm, which uses automated and manual tracking methods, checks products found on and off Amazon to ensure merchants on its marketplace are not charging significantly more than Amazon rivals are.
Amazon is wary of engaging in a price war with competitors it does not consider reputable.
The company said its qualification standards ensure that it does not compare or match prices against what is sees as merchandise from questionable marketplaces – including products that might be counterfeit.
Much of the merchandise sold on Temu is from vendors and suppliers based in China.
In advertisements and on social media platforms, Temu has touted low prices for home goods, electronics and apparel shipped from China, including US$5 (RM23) dresses and US$2 (RM9) make-up brush sets, with the hopes of competing with Amazon.
Neither Temu nor its US-based lawyer at Mandell Menkes returned multiple messages seeking comment.
On its website, the company stated that it has “a strict policy against the listing or sale of products that violates a third-party’s trademark, copyright or patent rights.”
Temu is “not actively involved in the listing and sale of sellers’ items,” and vendors are responsible for getting the necessary licenses for their stores, the statement said.
Amazon’s decision to ignore Temu’s prices – rather than compete with them – highlights the dilemma Amazon faces in keeping prices competitive while ensuring that products on its platform are safe and authentic.
To be sure, Amazon has battled its own counterfeit problem in past years. The retailer said it has ramped up its reporting of fakes to law enforcement along with other initiatives to track and combat counterfeits.
Temu’s general merchandise value, or total value of goods sold, has increased from US$141.5mil (RM654mil) in January to US$634.8mil (RM2.9bil) in May, according to YipitData. — Reuters
