Target explores factory-direct shipping model
KUALA LUMPUR: Target is exploring the delivery of products directly to customers' homes from factories, similar to the Chinese e-commerce rivals Temu and Shein, Bloomberg News reported on Tuesday, citing people familiar with the matter.
The move comes at a time when the big-box retailer, similar to the broader retail industry, struggles with stiff competition, persistent declines in sales and muted spending amid tariff uncertainty.
According to the report, Target is looking to expand its range of low-cost offerings through this initiative to focus on lower priced and new products.
The Minneapolis, Minnesota-based company's effort, which is said to be in early stages, includes products such as apparel, household goods and other non-food items, Bloomberg News reported.
Target did not immediately respond to a Reuters request for comment.
Competitors such as Temu, which is owned by PDD Holdings , and fast-fashion giant Shein had earlier benefited from the service of drop-shipping items directly to customers on the back of the 'de minimis' exemption.
'De minimis', a legal term referring to matters of little importance, describes the US waiver of standard customs procedures and tariffs on imported items worth less than US$800 shipped to individuals.
The Trump administration, however, ended duty-free access for low-value shipments from China and Hong Kong to the US on May 2, removing 'de minimis' exemption, Temu saw a steep decline in daily US users last month, compared with March.
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