China-Based Sellers Now Dominate Amazon’s Marketplace: What This Means for the Industry

The e-commerce landscape continues to evolve, and in 2024, a major milestone was reached: China-based sellers now account for more than 50% of Amazon’s top sellers, surpassing their U.S. counterparts. This marks a pivotal moment in the marketplace’s history, reflecting significant shifts in global trade and seller dynamics. Let’s explore the key details behind this trend and its implications for sellers, buyers, and the broader industry.

The Numbers Behind the Shift

For nearly a decade, the share of Chinese sellers on Amazon.com has steadily increased. According to research by Marketplace Pulse, the current breakdown of top sellers on Amazon is as follows:

• China-based sellers: Over 50%
• U.S.-based sellers: Roughly 45%
• Other countries (U.K., Canada, etc.): A small remaining percentage

Interestingly, Amazon only publicly acknowledged the growing dominance of Chinese sellers in its 2024 Form 10-K filing with the SEC, calling their presence “significant.” However, this trend has been brewing for years, with Chinese sellers leveraging their proximity to manufacturing hubs, lower production costs, and aggressive pricing strategies to capture market share.

The Rise of Amazon Haul

One of the most notable developments in 2024 was Amazon’s launch of Amazon Haul, a dedicated section designed to showcase products sold directly by China-based sellers.

• Launch details: Introduced in November 2024 as a small experiment, Amazon Haul was later heavily promoted with discounts of up to 60% subsidized by Amazon itself.
• A “Made in China” section: Unlike other categories on Amazon, Haul is exclusively comprised of China-based sellers, echoing the business model of platforms like Temu.

Amazon Haul underscores the company’s strategic push to strengthen ties with Chinese sellers. However, it also raises questions about the absence of similar initiatives for other seller demographics, such as a “Made in America” section.

Manufacturing Shifts and Global Trade Dynamics

While most products on Amazon are still “Made in China,” there’s a growing divergence between “Made in China” and “Sold by China.”

• Manufacturing migration: Chinese sellers are increasingly shifting production to countries like Vietnam to avoid U.S. tariffs, mirroring broader trends in global trade.
• Reshoring in the U.S.: According to Kearney’s reshoring index, China now accounts for less than half of the U.S.’s low-cost imports from Asia, signaling a gradual diversification of sourcing.

Despite these shifts, Chinese sellers continue to dominate Amazon, generating hundreds of billions in global sales. Amazon’s reliance on these sellers exposes it to regulatory, tariff, and reputational risks, but the company benefits from consistent fee structures regardless of seller location.

Broader Implications for the Industry

The growing market share of Chinese sellers on Amazon isn’t an isolated phenomenon. Competitors like Walmart have also seen an increase in Chinese sellers, with their share rising to 30% from 20% in recent years. This trend has far-reaching consequences:

1. Challenges for U.S. sellers: Increased competition from Chinese sellers puts pressure on U.S.-based businesses, impacting jobs, taxes, and the domestic supply chain.
2. Quality and counterfeit concerns: The shift raises questions about product safety, authenticity, and overall quality assurance.
3. Global e-commerce strategies: Companies are balancing cost efficiencies with regulatory risks as they navigate a more interconnected marketplace.

What Lies Ahead

As Chinese sellers continue to dominate Amazon and other e-commerce platforms, the gap between manufacturing and sales hubs widens. For U.S. sellers, staying competitive may require a focus on product differentiation, branding, and leveraging local advantages.

Amazon’s prioritization of China-based sellers, exemplified by initiatives like Amazon Haul, highlights the complex trade-offs of a globalized marketplace. Whether this benefits or harms sellers in the long term will depend on how well businesses adapt to this new reality.

Stay tuned for more updates as we continue to track these developments.

Ruben A.
CEO at PAS