Amazon using toothpaste and detergent to deal with its two big Chinese problems

Amazon has shifted its focus toward offering everyday essentials like toothpaste and detergent. This change has increased sales volume and customer frequency but has also lowered average selling prices (ASP). According to Reuters, the move is a strategic response to the growing competition from China's fast-fashion retail companies such as Shein and Temu who are changing he market or disrupted it with super low prices and rapid shipping pace.

Amazon is aiming to capture more consumer spending by stocking up and offering essential items. "The strength in everyday essentials revenue is a positive indicator that customers are turning to us for more of their daily needs," said Chief Financial Officer Brian Olsavsky. "We see that when customers purchase these types of items from us, they build bigger baskets, shop more frequently and spend more on Amazon."

Amazon reported increased shopping frequency and low-priced item additions at checkout. Shein and Temu, popular in the U.S., pose a threat to Amazon's market share. Shein, focusing on low-cost fashion, and Temu on home decor, have gained popularity, especially among younger consumers.


To compete, Amazon reduced fees on clothing items under $20 to match Shein's prices. Shein's recent entry into everyday essentials and beauty products may further challenge Amazon.

To manage lower ASPs, Amazon leverages its logistics network to cut costs and improve delivery times. The company continues to invest in technology, innovation, and customer experience to stay competitive. Amazon aims to balance its focus on everyday essentials with its high-margin electronics and premium products.

However, this strategic shift won't come without the hurdles. Amazon's toothpaste-detergent game, or the focus to prioritise volume over value carries risk of diluting its brand image and hiting the profit margins. Amazon would need to balance its focus on everyday essentials with its high-margin electronics and premium products.

(With ToI inputs)