E-commerce giant Amazon (NASDAQ:AMZN) plans to launch a new section on its site that will include low-cost items that ship directly from Chinese warehouses to international buyers, according to a report by The Information. This move is Amazon’s most aggressive response yet to competitors like Temu and Shein, and it will offer unbranded fashion products, home goods, and daily necessities with delivery times of nine to 11 days. As a result, shares rallied in today’s trading and made Amazon a $2 trillion company for the first time in its history.
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According to the report, Amazon informed Chinese sellers in private meetings that it would start signing up merchants this summer and begin accepting inventory in the fall. It is unclear if these shipments will use a U.S. trade provision that exempts packages under $800 from customs duties, which is a strategy used by Shein and Temu.
This could be a winning move for Amazon if it can ship products from China to Western countries faster than its competitors. Shipping speeds are often a major deciding factor when it comes to online shopping, especially since companies like Amazon have spoiled us with shipping times as fast as the same day.
Is Amazon Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 42 Buys assigned in the past three months, as indicated by the graphic below. After a 44% rally in its share price over the past year, the average AMZN price target of $221.55 per share implies 13.92% upside potential.
