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Amazon (NASDAQ:AMZN) Explores Strategies to Combat Temu and Shein
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Amazon (NASDAQ:AMZN) Explores Strategies to Combat Temu and Shein

Story Highlights

Temu and Shein have gained instant popularity among value-driven buyers. Amazon is strategizing its response to counter these two new competitors.

Online shopping platforms Temu and Shein have gained instant popularity among value-driven buyers in the U.S. In response to this escalating e-commerce rivalry, particularly for low-priced goods, Amazon (NASDAQ:AMZN) is exploring new strategies, as a Wall Street Journal report highlighted. 

Temu and Shein sell incredibly cheap products, thus driving value-conscious customers to their platforms. Per the report, both platforms have witnessed a surge in web traffic as high inflation continues to take a toll on consumer spending. 

Temu was launched in September 2022. It is a subsidiary of PDD Holdings, the parent company of China’s e-commerce company Pinduoduo (NASDAQ:PDD). Since its launch, the monthly unique visits to its platform have multiplied. Similarly, visits to Shein’s platform have also surged.

The sudden surge in popularity of these shopping platforms has caught Amazon off guard, which has unusually refrained from matching the prices of several products these companies offer. It’s worth highlighting that Amazon typically employs various price-matching tools to ensure it provides some of the most competitive prices online. Nonetheless, AMZN is looking into strategies to fend off competition for less expensive products with extended delivery times. Meanwhile, let’s look at what Wall Street analysts recommend for its shares. 

Is Amazon Stock Expected to Go Up?

Amazon stock is up about 54% year-to-date. Its solid second-quarter results, which crushed Wall Street’s estimates, signs of stabilization in the cloud business (AWS), and steep cost reduction measures have driven its share price higher. Despite this notable appreciation in value, Wall Street analysts expect AMZN stock to go up from current levels.

With 39 Buy and one Hold recommendations, Amazon stock has a Strong Buy consensus rating. Analysts’ 12-month average price target of $176.18 implies an upside of 36.45%.

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Amazon (NASDAQ:AMZN) Explores Strategies to Combat Temu and Shein
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