Amazon is slashing the fees it charges sellers in Europe as it faces rising competition from low-cost marketplaces such as Shein and Temu.

The company said on Tuesday that the move, one of its biggest fee cuts to date, will initially target reductions for sellers of low-priced fashion items.

Amazon will reduce referral fees on clothing and accessories to five per cent from 7 per cent for items priced up to €15 ($17.41) or £15 ($19.79), and to 10 per cent from 15 per cent for items priced between €15 and €20, or £15 and £20.

The changes take effect December 15.

By comparison, Shein charges sellers a 10 per cent referral fee on its EU platforms and 12.24 per cent in the UK, with new sellers paying no referral fees for their first 30 days.

“As we continue to lower our cost to serve through operational improvements and innovation, we are passing on greater savings to our ‌selling partners,” Amazon said.

Shein, offering tops for as little as €3 and jeans for €8.20, has gained market share from European fast-fashion retailers and challenged Amazon by selling a wide range of products, from duvet covers to vacuum cleaners.

Amazon remains the leading e-commerce platform in Germany, France, and other European markets, where revenue is projected to grow seven per cent this year to reach €900 billion, according to industry group Ecommerce Europe.