Investing.com -- Bank of America analysts view Amazon’s recent beta launch of its “Haul” storefront as a strategic move to counter rising competition from fast-fashion giants Shein and Temu.
Amazon’s Haul, currently in beta on its mobile app, offers a range of low-priced items across 35 categories, including apparel, home goods, and electronics.
According to BofA, Haul’s competitive pricing positions it as a compelling alternative to Shein and Temu, with items like $1 eyelash curlers, $3 iPhone cases, and $14 fleece jackets.
The bank explains that “Haul” items ship directly from China, with delivery in one to two weeks for a $3.99 fee on orders under $25—a potential advantage over Temu’s and Shein’s more costly express shipping fees of $12.90.
BofA notes that Amazon (NASDAQ:AMZN) could be “more insulated from potential losses related to shipping costs,” though this comes with a trade-off in competitiveness for orders below $25 due to Temu’s and Shein’s free shipping options.
Temu and Shein collectively represent about a 2% share of the U.S. eCommerce market, with their growth creating “a 1-point headwind to Amazon’s sales over the last year,” according to BofA.
By launching Haul, Amazon hopes to regain this lost momentum, potentially translating into a 1-point tailwind for the company by 2025 if the app gains traction.
However, BofA flags that the Haul model could face regulatory challenges.
They highlight that President-elect Trump is expected to raise tariffs on Chinese imports, which could raise product prices by 30% or more.
If Haul’s profitability becomes untenable under new tariffs, BofA says Amazon could pivot by sourcing from other regions or even closing the storefront with minimal financial impact.
Despite these potential hurdles, BofA views Haul as a low-risk initiative that allows Amazon to “defend share at limited financial impact” and maintains its Buy rating on Amazon’s stock.