Amazon Launches Haul Storefront to Compete with Fast Fashion

Overview
Bank of America analysts believe Amazon's new beta storefront, "Haul," is a strategic response to competition from fast-fashion companies Shein and Temu.

Details of Haul
Currently in beta on the mobile app, Haul offers low-priced items across 35 categories, including apparel, home goods, and electronics. Examples include:
– $1 eyelash curlers
– $3 iPhone cases
– $14 fleece jackets

Shipping and Pricing
Items ship directly from China with a delivery time of 1-2 weeks for a $3.99 fee on orders under $25. This is a potential advantage over the $12.90 shipping fees from Shein and Temu.

Market Impact
BofA notes that Shein and Temu together hold about 2% of the U.S. eCommerce market, contributing to a 1-point decline in Amazon's sales. Haul aims to turn this trend around, potentially boosting Amazon by 1 point by 2025 if successful.

Regulatory Challenges
However, regulatory issues loom, particularly regarding potential tariff increases on Chinese imports, which could raise prices significantly. BofA suggests that if the Haul model becomes unprofitable, Amazon could source from alternative regions or discontinue the storefront with little financial fallout.

Conclusion
Despite these challenges, BofA considers Haul a low-risk initiative for Amazon to maintain market share and upholds a Buy rating on the company's stock.