Target Exploring Factory-Direct Shipping Model to Boost Low-Cost Offerings and Compete with Chinese E-Commerce Rivals

(Reuters) - According to a Bloomberg News report on Tuesday, Target (TGT) is reportedly exploring the delivery of products directly to customers' homes from factories, similar to the Chinese e-commerce rivals Temu and Shein. The move comes as the big-box retailer struggles with stiff competition, persistent declines in sales, and muted spending amid tariff uncertainty.

The Minneapolis, Minnesota-based company is looking to expand its range of low-cost offerings through this initiative, focusing on lower-priced and new products. The effort, which is said to be in early stages, includes products such as apparel, household goods, and other non-food items.

Competitors such as Temu, 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. However, the Trump administration ended duty-free access for low-value shipments from China and Hong Kong to the U.S. on May 2, removing 'de minimis' exemption. As a result, Temu saw a steep decline in daily U.S. users last month compared with March.

Target did not immediately respond to a Reuters request for comment.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Maju Samuel)