Cross-border e-commerce companies are not immune to the low-price "two-choice"

In 2025, competition in the cross-border e-commerce industry is becoming increasingly fierce, and low-price strategies have become an important means for major platforms to compete for market share. Amazon launched the "Low Price Store" plan, and promoted merchants to practice "lowest price" through traffic allocation and reward and punishment systems, and was even accused of requiring sellers to "choose one of two". At the same time, emerging platforms such as TEMU have rapidly risen with their low-price advantages and snatched away many users. Walmart has also attracted merchants to lower prices by reducing commissions, further intensifying market competition. This article will explore the low-price competition strategies of cross-border e-commerce platforms and how merchants can find new growth opportunities in this changing situation.

In the new year, the low-price war among cross-border e-commerce companies is still spreading overseas.

Since the second half of last year, Amazon, which has been sitting firmly on the Diaoyutai, has been making frequent moves. First, it announced the plan for a "low-price store" at a closed-door meeting in June, and officially launched the low-price store "Amazon Haul" in December.

Prior to this, Amazon also secretly launched some "gadgets" to help buyers select the lowest-priced products, such as "price power tags" and "price history query functions", which in turn forced sellers to join the "price war".

Behind the old giants' active pursuit of change is the rapid rise of cross-border e-commerce platforms such as TEMU and SHEIN. They have brought the wind of e-commerce involution to the United States and forced Amazon to make greater adjustments to cope with the impact.

To this end, Amazon has also begun to target its “low prices” to merchants on its main site, but will the cross-border e-commerce sellers, who have been comfortable for a long time, buy into it?

01 Cross-border e-commerce melee

Amazon’s low-price strategy has become aggressive since the second half of last year. First, some merchants said they received a warning letter from Amazon asking them to “choose one of two products”. Later, the well-known digital brand Anker allegedly withdrew from TEMU and returned to Amazon. Some users searched for the Anker brand on TEMU’s US site and found that the brand store was displayed as “temporarily closed”, with only some products from third-party merchants on display.

In the past few years, Anker has been a top seller on the Amazon platform and has been the top seller in its category in the U.S. From January to June last year, Anker achieved revenue of 9.648 billion yuan, of which more than 5 billion yuan came from Amazon.

But since July last year, Anker has begun to enter TEMU and sell products in a semi-hosted model, with pricing controlled by the platform; on Amazon, Anker directly controls pricing.

However, Anker's prices on TEMU are still comparable to those on Amazon, and some users say that in most cases, its prices on Amazon are cheaper. Industry insiders say this may be because Anker and the platform are conducting A/B testing on prices, which corresponds to the future pricing power of both parties.

But this is not good news for Amazon. In the past period of time, Amazon has relied on its high-end market positioning and perfect logistics and distribution system to help start-up merchants build their brands and gain the trust of consumers.

However, with the rise of low-cost cross-border e-commerce platforms such as Temu, even though they still cannot compete directly with Amazon in terms of logistics and services, they have already snatched away a lot of users with their "low prices". According to Salesforce data, 61% of consumers use platforms such as TEMU mainly because they are "cheap".

In addition, TEMU is also planning a big move, including attracting more brand merchants to move in. Compared with price involution, TEMU is also following Pinduoduo's development path, promoting the upward development of the platform by attracting brand merchants, but Amazon does not seem willing to give TEMU more space.

Although Amazon quickly came out to refute the rumors after the "choose one of two" incident, saying that the claim of requiring sellers to sell exclusively on Amazon Mall is not true.

But in fact, even if Amazon does not intervene in a "visible" way, it can still push merchants to practice "lowest price" through traffic allocation, reward and punishment system, etc. Although merchants can choose to abandon the Amazon platform, most merchants actually have no choice considering the platform's traffic and scale.

According to the self-media "Cross-border E-commerce Cross-border House", some local American sellers said that their product links may have been directly blocked by Amazon because they sold at lower prices on TEMU.

The seller said that the links to his three products were blocked by Amazon. The reason given by Amazon was that their prices were not competitive compared to external ones, and the external reference price was the selling price of this product on TEMU. Although no direct reason was given, the implication of "choose one of two" was already very obvious.

Earlier, some merchants complained that Amazon forced sellers to lower prices, otherwise some products would be taken off the shelves, and the reason was that "the prices were not competitive and did not meet the requirements to become recommended quotations."

However, what is even more surprising is that while Amazon and TEMU were competing with each other, Walmart also staged a "secret move". Some merchants said they received a notice from Walmart that the commission of some products would be reduced from 15% to 3%, allowing them to reduce the price of products on the Walmart platform to the same level as Amazon and TEMU.

02 The market cannot accommodate a second player

The "choose one of two" policy on e-commerce platforms is not unfamiliar to domestic consumers. In December 2023, the Beijing High People's Court ruled on JD.com's lawsuit against Tmall for "choose one of two", believing that Alibaba's monopoly behavior caused serious damage to JD.com and ordered it to pay JD.com 1 billion yuan in compensation.

The "choose one of two" feud between JD.com and Alibaba has a long history. As early as 2013, a senior executive of JD.com Mall accused JD.com merchants of being asked by Alibaba to "choose one of two". After that, not only JD.com and Alibaba, but also JD.com and Dangdang.com and Suning Appliance also had "choose one of two" disputes.

Walmart's "stealing home" move is actually very similar to the battle between Alibaba and JD.com, when Pinduoduo quietly relied on social fission and low-price advantages to carve out a path in the e-commerce market as a "dark horse".

From this we can see that there is no unchanging strategy in the business world, nor is there any way of playing by the rules. After all, in any market segment, there is only one "first", and it will inevitably find ways to suppress the "second" and "third", while actively seeking change, and even referring to the offensive of latecomers, in order to maintain the "leading position".

This is also Amazon's current situation. According to the financial report data, in the first three quarters of 2024, its revenue was US$450.167 billion, a year-on-year increase of 11.20%; the cumulative net profit was US$39.244 billion, a year-on-year increase of 98.19%. Both revenue and profit maintained steady growth.

However, Amazon's revenue growth has become very slow. Although its net profit is still considerable, the growth rate has been declining quarter by quarter. Its profit growth rate was 229% in the first quarter, 100% in the second quarter, and only 55% in the third quarter.

Amazon's chief financial officer said in the second quarter earnings conference last year that revenue growth in the North American market was slightly lower than expected, mainly because consumers chose to buy cheaper products, resulting in a decline in the average selling price (ASP).

The growth in its net profit was mainly due to the cost reduction and efficiency improvement of AI technology, as well as the revenue brought by cloud business. In comparison, the growth rate of Amazon's e-commerce business is significantly lower than the industry growth rate.

For reference, Amazon achieved net sales of US$61.411 billion in the third quarter of last year, a year-on-year increase of 7%. According to a survey report by Stocklytics, the e-commerce market value is expected to reach US$4.11 trillion in 2024, a year-on-year increase of 15%.

It can be seen that the rise of cross-border e-commerce platforms such as TEMU has begun to snatch Amazon's original market share, which has also limited Amazon's net profit growth.

Amazon's sense of crisis is growing day by day, and changes are inevitable. As an e-commerce platform that has been established for 30 years, Amazon has gradually changed from a vibrant "young man" to a "middle-aged man" that follows traditions. Its situation is similar to that of Alibaba and JD.com.

Fortunately, Amazon also has the courage to "turn the elephant around", and now it has begun to subvert itself.

The first is the launch of the low-price strategy. An Amazon executive said that the low-price store "Amazon Haul" can bring profit growth to Amazon, while enabling Amazon to provide attractive product selections for the fast-growing low-price market segment and open up new incremental markets.

The second is to deepen the development of Chinese sellers. At the latest 2025 Seller Launch Conference, Amazon said it would increase its low-price mall, open supply chain smart hosting services to Chinese sellers, and other initiatives; and in 2024, Amazon also mentioned holding more seminars for sellers in China's third- and fourth-tier cities.

Behind Chinese sellers are China's powerful supply chain resources. The reason why cross-border e-commerce platforms represented by TEMU have price advantages is also due to the industrial belt resources behind Chinese sellers. Amazon obviously also wants to follow suit to further enrich its product pool.

03 The era of great changes for sellers

But for now, Amazon is still experiencing the test of the market. For example, the low-price store "Amazon Haul" has been online for more than a month and is still a "test version". Some users have complained that the delivery speed is very slow and there are cases of lost orders.

In addition, the shopping experience and product richness of "Amazon Haul" are significantly different from those of TEMU, probably because the number of products is too small and it fails to cooperate with more interactive promotions.

But for domestic cross-border merchants, this is ultimately an additional option, especially as TikTok has recently faced tremendous pressure and policy uncertainty around the world. Some TikTok sellers have even sold their stores at low prices before the ban.

By 2025, the landscape of the cross-border e-commerce industry will probably only become more complicated. First, the policies of countries around the world are facing greater uncertainty. For example, Vietnam previously asked TEMU to suspend its business; the EU is also considering imposing new taxes on cross-border e-commerce platforms, which may affect the competitiveness of most cross-border products.

Secondly, the competition among cross-border e-commerce platforms will become more intense, which will force each platform to introduce more new rules and gameplay. At the end of last year, Amazon strengthened its review of platform rules, resulting in more and more seller accounts being blocked. According to incomplete statistics, about 5,000 Chinese sellers were blocked by Amazon in November alone.

In addition, merchants also need to further adapt to the gameplay of different platforms. For example, TEMU recently opened the in-site advertising function for semi-hosted sellers. Prior to this, TEMU mainly adopted a natural traffic distribution mechanism, which means that players may have to explore new traffic strategies based on "absolute low prices."

Faced with the changes in the cross-border e-commerce industry and platforms, the only thing merchants can do is to accept and adapt to the changes.

On the one hand, in addition to the price, people can also try the quality and category of the coupons, and use efficiency to hedge cost pressure by focusing on higher-profit products; on the other hand, merchants can also start a diversified layout and try to open stores on different platforms to hedge the impact of the new tariff policy.

Finally, merchants who are tired of price competition can also consider exporting their brands overseas and impressing overseas consumers through innovations in technology, design, concepts, etc., such as telling good stories about Chinese culture and creating unique product features.

In the past year, against the backdrop of a global economic slowdown, platforms and merchants have begun to realize that only by opening up new venues can they find new growth. For example, Amazon has set up low-price stores; TEMU has started advertising; and AliExpress has focused on services, providing more rights and interests for high-quality POP merchants...

To some extent, change may bring greater uncertainty, but at the same time, risks and opportunities also coexist. For domestic cross-border merchants, the challenges in 2025 are obvious, but opportunities are also brewing in difficulties.

Author丨Zhuiming Editor丨Jiang Nut