One of the biggest rivals for Amazon (NASDAQ: AMZN) these days is Temu. Parent company PDD Holdings (NASDAQ: PDD) has been putting a lot of money into Temu to advertise the low-priced online retailer. Not only is Temu luring shoppers away from Amazon, but even dollar stores are experiencing challenges as consumers are looking to buy from the site in order to save as much money as they can amid high inflation.

It's a troubling situation for Amazon, to the point the company has announced plans to launch a discount store that can compete more directly against Temu and other online retailers on price. But that may not be necessary. Here's why.

Shein and Temu have two of the biggest Chinese e-commerce sites in the world. But that doesn't mean they're on friendly terms with one another. Privately held Shein is suing Temu over claims of copyright infringement, and it says Temu has copied Shein's product images. In its lawsuit, it also alleges something startling: Temu loses money on every single transaction.

Continue reading

Source Fool.com