Australian retailers are facing a major new problem that already has Amazon worried, as consumers look for value due to financial pressure and rising prices.

Temu is a Chinese online web site that is stripping sales away from retailers with cheap deals, free shipping and they are growing “very fast” according to Australia Post who ship large volumes of their products to Australian customers.

Some products sell for around a third of the prices seen on Amazon.

ChannelNews has also been told that some distributors of value and affordable premium products cannot match the pricing that Temu is offering consumers.

“I cannot buy product from our manufacturers in China at the retail price that Temu is shipping into Australia for” said one distributor of electronics supplier.

Amazon is also under pressure with the Chinese online retailer now servicing 75M US consumers a month. “These are consumers that use to shop at Amazon especially via their merchants” said one observer.

The Company that ships appliances, automotive accessories, consumer electronics, fashion goods and home goods is now operating in 30 Countries.

Temu, is part of Chinese e-commerce group PDD Holdings, and have already snared half of Amazon’s total business, according to consulting firm Global Wireless Solutions the business is now looking for new markets such as Australia.

Unlike Amazon the bulk of Temu’s stock is not branded and comes direct from a manufacturer.

Users spend an average of about 19 minutes a day on the app, compared with 11 minutes on Amazon claim GWS.

“Bringing the allure of window shopping and flash sales — a model that powered brick-and-mortar retail for years — onto a mobile app is clearly proving to be a successful strategy,” said Global Wireless CEO Paul Carter.

ChannelNews has tested this site and the goods shipped are high quality and have taken on average 7-8 days to ship.

“Prices outweigh the inconvenience of having to wait a week,” one shopper she said.

Nikki Asia claims that the secret to Temu’s low prices is the supply chain it has built in China, where it gives smaller companies a path into e-commerce.

Many of the products on offer are similar to those found on Chinese online marketplaces like PDD’s Pinduoduo and Alibaba Group Holding’s Taobao.

“Temu is growing fast but on a very small scale compared to PDD’s China business,” said Bo Pei, an analyst at U.S. Tiger Securities.

“It will take a few years to reach a scale that will contribute to revenue meaningfully.”

Even so, PDD remains focused on overseas operations because intense competition at home has made growth harder to achieve.

In July Temu filed a lawsuit in a U.S. District Court alleging that fellow Chinese online trading Company Shein violated antitrust laws in the USA as they fought to stop the growth of Temu.

According to the complaint, Shein pressured its network of over 8,000 vendors to enter into exclusive arrangements in which they are not allowed to do business with Temu.

If Shein did not engage in such anticompetitive practices, “Temu would move as much as [three times to four times] the volume of ultrafast fashion merchandise it currently moves daily,” the suit alleges.

Competition is not the only cause for concern at Chinese online marketplaces.

The U.S.-China Economic and Security Review Commission, a bipartisan advisory panel, has drawn up a report that names Shein and Temu regarding concerns about forced labor in China’s Xinjiang region and violation of intellectual property rights.

A select committee in the U.S. House of Representatives issued a separate report saying that Shein and Temu has used a loophole to minimize the likelihood that shipments are screened for content produced by forced labor.