Amazon expands its low-cost e-commerce platform to global markets amid competition from Chinese rivals

8 November 2025

Amazon is making a strategic play to reclaim ground in low-cost online shopping by expanding its budget-focused e-commerce service beyond the United States to international markets. The move represents the company’s most direct response yet to the surging popularity of Chinese-owned platforms like Temu and Shein, which have rapidly reshaped global consumer expectations around price and convenience.

The new service internally dubbed “Amazon Low-Cost Stores” by company insiders will feature goods priced predominantly under $20 and sourced from manufacturers in China and other Asian markets. It aims to deliver small, lightweight products directly to consumers at competitive prices, albeit with longer shipping times that mirror those of Temu and Shein. The initiative first launched quietly in the United States earlier this year before being scaled up for customers in Europe, Asia, and Latin America.

By taking the platform global, Amazon hopes to capture a segment of shoppers who have gravitated toward ultra-cheap imports during a time of economic caution and inflation-adjusted budgeting. Analysts say the new approach also signals a major philosophical pivot for the Seattle-based retailer, which traditionally prioritised fast shipping and domestic fulfillment. The company now appears willing to trade speed for affordability, betting that the growing appetite for bargain hunting outweighs the premium consumers once placed on Amazon Prime’s two-day delivery model.

A spokesperson for Amazon confirmed that the global rollout will leverage a hybrid logistics network, combining existing fulfillment centres with direct-from-supplier shipping models. The company is also piloting a simplified returns policy designed for low-value goods, aiming to reduce operational costs without undermining trust. Industry observers suggest this system could mirror Temu’s “keep-it” refunds, where customers are reimbursed without needing to ship items back, particularly when products are inexpensive to replace.

According to analysts at Bernstein, Amazon’s low-cost division has already recorded strong early traction in categories such as fashion accessories, home gadgets, and novelty items areas where impulse buying dominates and price sensitivity drives conversion. The firm estimates that if scaled effectively, this model could add tens of billions in gross merchandise value to Amazon’s retail portfolio within three years.

Competition, however, remains fierce. Temu, owned by PDD Holdings, has poured millions into global marketing, while Shein continues to dominate the ultra-fast-fashion niche through rapid-production cycles and social-media-driven trends. Both platforms have reshaped consumer expectations with prices that often undercut Amazon’s core catalogue by 30 to 50 percent. To counter this, Amazon is banking on brand trust, customer-service consistency, and a massive existing user base.

For suppliers, the model could be transformative. Amazon’s platform offers vetted Chinese and Southeast Asian manufacturers access to hundreds of millions of global customers under a regulated marketplace framework. In exchange, merchants must adhere to stricter quality, safety, and transparency standards than those typically enforced on Temu or Shein. This could help Amazon differentiate its platform as the more reliable choice for bargain shoppers seeking reassurance on product authenticity.

Internally, the initiative reflects a broader recalibration of Amazon’s retail priorities. The company’s core U.S. e-commerce growth has slowed from pandemic highs, while its cloud computing and advertising divisions have become profit engines. The low-cost expansion gives Amazon a chance to reignite retail momentum by engaging younger, price-conscious audiences worldwide particularly in emerging markets where disposable income remains limited.

Still, challenges loom large. Analysts warn that longer delivery times and thinner margins could strain Amazon’s profitability and customer satisfaction metrics. Balancing these factors while fending off aggressive discounting by competitors will test Amazon’s operational flexibility and logistics expertise. Moreover, expanding into low-cost e-commerce carries reputational risks if suppliers fail to meet product or labour-standard expectations, issues that have plagued some rivals.

For consumers, the impact could be immediate. With the rollout, Amazon shoppers across Europe, Asia, and Latin America will soon see a new “Low-Cost” section appear on their homepages, featuring trending cheap items shipped directly from Asia. Early previews suggest the interface will be heavily gamified borrowing cues from Temu’s mobile experience, with flash deals, reward points, and referral bonuses designed to keep users scrolling and spending longer.

In effect, Amazon’s globalisation of its low-cost platform represents not only a competitive manoeuvre but also a cultural shift for the e-commerce giant. For years the company built its identity on convenience and speed; now it is betting that in a world reshaped by inflation and digital-native shopping habits, value is the new currency of loyalty.