Amazon is planning to launch a discount store in an effort to compete with Temu and Shein.

• Amazon held a private event for Chinese sellers, revealing plans for a new budget storefront that offers affordable clothing, home goods, and other products.
• Two emerging e-commerce sites with ties to China, Temu and Shein, have grown in popularity in the U.S., and the storefront would directly compete with them.
• Amazon plans to launch its storefront this fall and will begin accepting products.

CNBC has learned that the company plans to introduce a new section on its website that will enable Chinese sellers to directly ship low-priced fashion and lifestyle items to U.S. consumers.

On Wednesday, Amazon announced its most aggressive effort to combat competition from Chinese e-commerce startups Temu and Shein, both of which have links to China, the world's second-largest economy, through an invite-only conference for Chinese sellers.

In recent years, Temu and Shein have expanded their presence in the U.S., attracting more American shoppers with their low prices on clothing, electronics, home goods, and other products.

Amazon's storefront will showcase a variety of unbranded items at affordable prices, including a gua sha facial massaging tool, arm weights, and phone cases, according to a presentation viewed by CNBC.

The presentation indicates that Amazon plans to ship products directly from China to the U.S., with the aim of delivering them to customers within nine to 11 days. Previously, Amazon sellers in China have utilized the company's fulfillment services, known as Fulfillment by Amazon, to send goods to warehouses in the U.S. before they were dispatched to customers.

Amazon sellers in China can save costs through the company's arrangement, which allows merchants to test new items through small-batch production. Shein employs a similar approach, known as on-demand manufacturing, where goods are produced in limited quantities and more are manufactured as demand increases.

Amazon spokesperson Maria Boschetti stated that the company is constantly seeking new ways to collaborate with its selling partners in order to enhance the customer experience by offering more variety, lower prices, and increased convenience.

The Information first reported on Boschetti's refusal to provide additional information about the company's plans. It is unknown when Amazon plans to launch its storefront, but the presentation indicates it will begin accepting products this fall.

Amazon is intensifying its efforts to attract Chinese merchants to its marketplace as it faces increasing competition. In December, the company established a new "innovation center" in Shenzhen and reduced the fees it charges sellers of inexpensive clothing.

In 2023, the number of Chinese sellers on Amazon's site grew more than 20% year over year, and the number of Chinese merchants with sales over $10 million increased by 30%.

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