A new study reveals Temu undercuts Amazon by 40%, but trust remains low. Will prices rise with new tariffs looming? See what this means for U.S. shoppers.
A new study by Omnisend, a leading ecommerce marketing company, analyzed shopping data on two of the biggest ecommerce rivals of the past year – Temu and Amazon – looking at differences in cost and product quality; and how often inventory matched between the two.
The study found that on average, buyers can save 40% ($13.37 per product) by shopping at Temu. However, the new U.S. tariffs will eliminate “de minimis” on Chinese goods, which means previously excluded products shipped direct to consumers and costing less than $800, will now be subject to the new tariffs, leading to cost increases for American consumers.
In a complementary survey of U.S. consumers fielded last week, 53% of respondents shopped on Temu in the last year, with 5% shopping several times per week, yet only 5% say they trust Temu. This is compared to 75% who have shopped on Amazon, 18% doing so more than once per week, with 87% trusting the platform.
Americans worry over tariffs
The survey also found that 42% oppose new tariffs on Chinese goods (34% are in favor, 24% undecided) and 56% of Americans are worried that the tariffs will drive up prices on Chinese goods.
Twenty-nine percent of Americans say that if prices go up on Chinese marketplaces like Temu, they would immediately stop buying or buy less. More than 20% said they would still shop there unless the increase is noticeable (20% or more).
Amazon products for less, questions on Temu quality
Omnisend’s research found that 77% of Amazon products have a similar product on Temu, with every tenth product being identical. However, the research further discovered that many bargains on Temu appear to be product knockoffs, and many product reviews may have been manipulated.
“Temu may still be able to undercut the prices of domestic products on Amazon as they have such high margins,” said Greg Zakowicz, senior ecommerce expert at Omnisend. “However, I expect consumers will soon see price hikes, particularly in categories including consumer electronics, beauty, children’s clothing and household goods – all categories that are popular on Temu. If manufacturers have a reason to raise prices – even on existing inventory – they will.”
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Consumer confidence on the decline
When it comes to consumer confidence in the U.S., Zakowicz adds “It’s no surprise to me that consumer confidence has dropped, and I expect this to remain negative in 2025 as the government and economy transition into a new operating normal. The trend of consumers seeking value with their purchases, especially with increasing grocery prices, will continue, benefiting companies like Walmart and Amazon. We should also expect to see a decrease in discretionary spending, which could lead to higher inflation.”
Other key findings from the Omnisend report include:
- Temu offers significantly steeper and more frequent discounts than Amazon, with some product categories seeing discounts as high as 98% vs. 67% on Amazon.
- Brand imitation concerns: The study uncovered Temu products that closely resemble well-known brands, often with modified packaging, blurred logos, or removed branding.
- Amazon maintains a major trust advantage, with products averaging 50,000 reviews per listing compared to just 1,500 on Temu.
- While conducting the research, Omnisend researchers observed disappearing reviews and instances of poorly reviewed products being removed and reuploaded, suggesting potential review manipulation.
- Temu’s strongest category is Fashion & Beauty, where it has close matches for 94% of Amazon’s listings. The least matched category is Food & Beverage.
- Automotive is the only category where Amazon beats Temu on price, offering products 12% cheaper on average.
With Temu and Shein gaining traction in the U.S. market, Amazon recently launched “Amazon Haul” — a storefront designed to highlight low-cost fashion and lifestyle products similar to what shoppers find on Temu.
The consumer survey found that 40% of Americans have shopped on Shein in the last year and 24% have already tried Amazon Haul.
“Amazon rarely reacts this quickly to competition, but the launch of “Amazon Haul” proves that Temu and Shein are changing the game,” says Zakowicz. “Temu’s ability to offer near-identical products at lower prices is forcing Amazon to rethink its pricing strategy and push harder into the budget-conscious segment.”
The flip side of a low price on Temu
Even though Temu offers a low price, there are some aspects where the company loses to its competition. First of all, the shipping time for items ordered on Temu is much longer than those ordered on Amazon or any other U.S.-based ecommerce platform.
Furthermore, one of the most striking findings from Omnisend’s report is the potential imitation of branded products on Temu. The study uncovered examples of well-known items being sold with brand names blurred or removed, raising questions about the trustworthiness of the platform.
Greg Zakowicz: “Temu is resetting consumer expectations around pricing”
According to Zakowicz, Temu’s aggressive approach is shifting consumer expectations on what everyday products should cost, putting pressure on competitors to adapt.
“Temu’s aggressive discounting strategy is reshaping consumer expectations around pricing. With discounts reaching as high as 72%, they are conditioning shoppers to expect ultra-low prices across multiple categories, particularly in Fashion & Beauty, where they have a 94% match with Amazon. It is important to say that most of those discounts are permanent, meaning they create the illusion that the low price is temporary even though it is not. If this trend continues, it could put pressure on other marketplaces, including Amazon, to rethink their pricing strategies and supplier relationships.”
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What this means for small and medium ecommerce businesses
As the ecommerce landscape shifts due to Temu’s pricing tactics and Amazon’s response, smaller online businesses must adapt to remain competitive. Zakowicz offers these key recommendations for SMBs looking to navigate this changing market:
- Leverage brand trust and authenticity. Shoppers may be attracted to low-cost options, but trust and brand loyalty remain strong differentiators. Focus on transparency, high-quality product descriptions, and capture customer reviews to build credibility.
- Optimize pricing strategies. While competing purely on price with Temu or Amazon may not be feasible, offering value-driven bundles, personalized promotions, and limited-time discounts can help attract and retain customers.
- Strengthen customer retention efforts. Loyalty programs, email marketing, and post-purchase engagement can encourage repeat business and reduce the impact of price-driven competitors.
- Diversify sales channels. Explore selling on alternative marketplaces like Etsy, Walmart Marketplace, or direct-to-consumer (DTC) platforms like Shopify to reduce dependence on Amazon or risk losing customers to Temu.
Emphasize fast and reliable shipping. Consumers often prioritize convenience over price. Offering faster shipping options or better customer service than low-cost competitors can give SMBs an advantage.
