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 e-commerce 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.
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 $5 dresses and $2 makeup brush sets, with the hopes of competing with Amazon.
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. Amazon punishes repeat offenders whose products are perceived to be overpriced by suspending or removing them from its marketplace.
Feixiang Wang, the chief executive of China-based MaiBo Technology Company, told Reuters in an interview that he found alleged copies of his company's $25.99 FitBeast-stamped exercise equipment on Temu for less than $5. When he saw the products, he worried that he would be penalized under Amazon's fair pricing policy.
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