Citigroup released a research report recently claiming that Amazon (AMZN.US) is planning to launch a low-price section similar to PDD Holdings' Temu. The section will sell non-branded outfits, housewares, and daily necessities priced lower than $20, which will be shipped directly from Amazon China's warehouses and delivered in 9 to 11 days. This move is seen as a response to the competition in the e-commerce market. The bank predicts that Chinese merchants facing price competition in cross-border e-commerce may be interested in an alternative market that offers pricing power, product selection, and assistance in reducing cross-border logistics costs.

Since the project is still in its early stages, Citigroup believes that Amazon's new low-price section is expected to only cover product categories with prices of $20 or less in the initial period. The report suggests that the impact on Temu's operations and appeal to US consumers may be limited in the short term but could potentially affect Temu's attractiveness to merchants in the long run. Citigroup maintained their 'Buy/High Risk' rating on PDD Holdings with a target price of $198.