Amazon $AMZN is taking back a piece of the pie from Temu and Shein in the battle for U.S. e-commerce market share.
Analysts at Deutsche Bank gave Amazon a price target hike from $230 to $266 in a report published Tuesday. The bank expects that the e-commerce giant will see incremental growth in the second quarter, despite some shopping deceleration throughout the month of June.
“What has become abundantly clear is that in the absence of Temu and Shein, Amazon share gains have accelerated,” Deutsche Bank analysts wrote in the report. “Amazon has meaningfully expanded U.S. industry share as Temu has pulled back.”
The report mentioned that Amazon is the only e-commerce company of scale that it tracks to see accelerated sales growth in June. Analysts expect third quarter revenue growth to be generally in line with second quarter growth.
Over the last few years, Shein and Temu have threatened Amazon’s dominance in the U.S. These online fast fashion retailers originated in China, capitalizing on the country’s low manufacturing costs, and quickly brought their network of third-party sellers overseas. Thanks to the de minimis trade exemption, Shein and Temu could ship thousands of products from China straight to American customers’ doors without paying import duties. This helped the companies swiftly gain market share in the U.S. as they became widely known for their cheap prices — think a $5 t-shirt or $3 sunglasses.
But that tax loophole expired in May, after President Donald Trump signed an executive order that banned the de minimis provision. As higher import costs threatened their business models, Shein and Temu shifted their advertising efforts from the U.S. to other countries in Europe and the UK, Reuters reported. The companies also warned U.S. customers that prices would increase ahead of Trump’s executive order. Both companies have taken steps to mitigate tariffs by expanding their U.S. operations.
Late last year, Amazon launched its shopping app Haul to compete with Shein and Temu, but it has yet to gain traction.