ARI SHAPIRO, HOST:

If you opened presents under the tree today, think for a second about how they got to you. Where were they made? Where were they purchased from? The answers to those questions can tell you something about how American shopping habits are changing. Amanda Mull writes about this in a recent piece for the Atlantic with the headline "Is This How Amazon Ends?" Welcome to ALL THINGS CONSIDERED.

AMANDA MULL: Thank you so much for having me.

SHAPIRO: OK, before we get to the question of whether we are really looking at the end of Amazon here, I think people should understand that there has been an important shift in how that company works. How has Amazon changed?

MULL: When Amazon began, it was sort of like most other retailers except online, which meant that the things that it sold to consumers were things that it had bought wholesale from suppliers of various types that it held in inventory. And then it shipped out one by one, two by two as people bought things. And that has changed over time.

They began what's called the marketplace program in the early 2000s and that program now accounts for most of the listings you see on Amazon. What a marketplace program is, is something that allows third-party sellers to display their wares for a particular retailer's audience. Think eBay. Think Etsy. These are the types of retailers that we most commonly associate this business model with. But Amazon also - 60% of its listings are product descriptions and photos that were put up by other people.

SHAPIRO: So Amazon becomes the middleman, basically?

MULL: Yeah, Amazon is a middleman. And these third-party sellers, Amazon currently has more than 2 million of them. They own their own inventory, they put it in Amazon's warehouses. Amazon delivers it, but Amazon is a conduit to buyers.

SHAPIRO: So if Amazon has shifted from being more of a traditional wholesaler to being more of a global flea market, you write that over the last several years, Americans have found a way to cut out the middleman. How are they getting around Amazon?

MULL: So Amazon's marketplace program, where it has really grown, especially in recent years, is in international sellers. And traditionally it's thought that, like, that would be a detriment to a retailer and its ability to attract American consumers. But it's sort of a frog boiled slowly thing. So many people use Amazon and have used it for so long that Americans, in aggregate, seem to have gotten really used to transacting with foreign sellers. So now a lot of shoppers have noticed this new crop of retailers - Shein, Temu.

SHAPIRO: Wait. Now, I had actually never heard of Shein or Temu before I read your article. And I get the impression I'm way out of the loop on this. So if anyone is as ignorant as me, will you just pause to fill us in on what those are?

MULL: Shein and Temu are companies that were founded by Chinese businesses. They aggregate the products of a lot of different, mostly Chinese sellers and sort of present those to the public. Shein has been popular among Americans for, like, a few years now, and they sell a really, really enormous selection of very, very inexpensive products. So the types of things that you might find on Amazon, you can usually find something, like, pretty similar on Shein or Temu for sometimes half the price. And sometimes it looks like the exact same thing because a lot of these sellers have been recruited, especially by Temu, who were selling on Amazon to now list their products on Temu either exclusively or also.

SHAPIRO: Can you give us a sense of how quickly these companies have grown?

MULL: So Temu in particular has had this sort of, like, stratospheric growth in less than a year. It did about $16 billion in revenue last year. And when you look for comparison at, say, target.com's revenue, they do about $20 billion a year in online sales. So in less than a year, this business has spun up an online retailer that is, like, 75% the size of Target, which is enormous. It is really, really hard to attract that many consumers in that short of a period of time. But these really, really low prices, especially, you know, amid rising inflation and some worries about the economy, they've been very, very effective.

SHAPIRO: And just to be clear, are these products that people are buying for sometimes half the price of Amazon any different from the products on Amazon? Are they made by people working under the same conditions? Are they inferior in any way?

MULL: That's sort of impossible to say. On average, some of them are going to be exactly the same, some of them are going to be coming from exactly the same sellers. Others are going to be a little bit junkier. Others might use substandard materials that might not always pass muster in the U.S. for safety standards. But it's impossible to tell, like, on a listing-by-listing basis. And a lot of these listings look really familiar if you spend time looking for similar products on Amazon.

SHAPIRO: So to return to the headline of your article, "Is This How Amazon Ends?", Amazon makes hundreds of billions of dollars a year. Is it actually in danger?

MULL: It's sort of hard to say. It is not in danger immediately. Americans by and large still love Amazon. Amazon, for a long time, its value proposition to many of its customers was putting this sort of respectable veneer on these really inexpensive imported products. But over time, as the experience of shopping on Amazon has become more clearly an experience of transacting with foreign sellers, I think a lot of Americans have just gotten used to doing that and no longer feel that it's as risky or as strange as it once was.

So if you're an overseas retailer that can offer products that seem similar, at least in their listings, but at, you know, half the price, three-quarters of the price, you're going to attract a lot of interest. And if Temu, Shein, these kinds of companies can satisfy enough of those customers enough of the time, you sort of see the logic by which Amazon might be in trouble eventually.

SHAPIRO: Amanda Mull is a reporter for the Atlantic. Thanks a lot.

MULL: Thank you so much for having me. Transcript provided by NPR, Copyright NPR.

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