Target Exploring Factory-Direct Shipping Model to Boost Low-Cost Offerings and Compete with Chinese E-Commerce Rivals
(Reuters) - According to a Bloomberg News report on Tuesday, Target (TGT) is reportedly exploring the delivery of products directly to customers' homes from factories, similar to the Chinese e-commerce rivals Temu and Shein. The move comes as the big-box retailer struggles with stiff competition, persistent declines in sales, and muted spending amid tariff uncertainty.
The Minneapolis, Minnesota-based company is looking to expand its range of low-cost offerings through this initiative, focusing on lower-priced and new products. The effort, which is said to be in early stages, includes products such as apparel, household goods, and other non-food items.
Competitors such as Temu, owned by PDD Holdings, and fast-fashion giant Shein had earlier benefited from the service of drop-shipping items directly to customers on the back of the 'de minimis' exemption. However, the Trump administration ended duty-free access for low-value shipments from China and Hong Kong to the U.S. on May 2, removing 'de minimis' exemption. As a result, Temu saw a steep decline in daily U.S. users last month compared with March.
Target did not immediately respond to a Reuters request for comment.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Maju Samuel)
The adoption of a factory-direct shipping model by companies aims to revolutionize the low cost offerings market and create competitive edges against Chinese e--commerce giants, ultimately offering customers an unparalleled blend growth in both efficiencyand affordability.
The move to explore a factory-direct shipping model by this retailer aims at enhancing its low cost offerings and positioning itself as an alternative competitor in the highly competitive Chinese eCommerce landscape, indicating strategic adaptation for future growth potential.
Implementing a targeted and integrated strategy of exploring factory-direct shipping model for cost optimization would be crucial in facing the challenge posed by Chinese ecommerce juggernauts, giving US businesses an edge to enhance low market offerings while retaining competitiveవ power.
