‘Made in China, sold on Amazon’ gadgets from Aukey, Mpow vanish from e-commerce site
- Product listings from major China-based electronics vendors have suddenly vanished from Amazon‘s listings
- US e-commerce giant Amazon has become a popular beachhead for Chinese vendors to expand overseas
Amazon.com has apparently blocked several prominent mainland Chinese merchants for alleged “suspicious behaviour”, in a move that industry insiders said is part of a targeted crackdown on questionable business practices sellers on the platform, including those based in China.
For over a week now, most Amazon listings from Aukey, a major Shenzhen-based electronics vendor, have been listed as “currently unavailable”.
Similarly, most products on Mpow, the main Amazon electronics store run by ByteDance and Xiaomi-backed consumer product firm Patozon, have not been available for purchase since late April.
Aukey and Mpow did not not immediately respond to inquiries from the South China Morning Post. While an Amazon spokesman said the company does not comment on individual cases, it has systems to detect “suspicious behaviour” and take prompt actions.
Neither Aukey or Mpow have been accused of fraud.
The two companies are part of a growing wave of Chinese vendors turning to Amazon to reach international customers.
In January, China-based sellers represented 75 per cent of all new merchants on Amazon, according to a recent report by consultancy Marketplace Pulse. The share of China-based sellers on Amazon’s US site has surged to 63 per cent this year from 28 per cent in 2019.
For some of the most successful sellers, the returns can be lucrative.
Aukey, which filed for an initial public offering in Shanghai in 2019 before withdrawing its application last April, generated over three-quarters of its revenue from Amazon in the first quarter of 2018 and 2019, according to its prospectus. It raked in 5.1 billion yuan (US$793 million) in sales in 2018, up from 3.7 billion yuan in 2017.
In the first half of 2020, Mpow saw its exports rise 29 per cent to 2 billion yuan, according to a financial statement released by the company‘s previous owner, Shenzhen-listed Global Top E-commerce.
As Chinese merchants flock to Amazon, some are bringing with them grey area practices common in Chinese marketplaces. These include making up fake reviews and inflating sales numbers, according to industry insiders.
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Amazon‘s recent action may be an effort to send a warning shot to bigger brands that the US platform will not tolerate such behaviour, said Ivan Platonov, research manager at EqualOcean, a China-focused investment research firm.
The disappearance of product listings from Chinese brands coincided with a recent report from antivirus product review site SafetyDetectives, which surveyed records from a breached server containing some 75,000 links to Amazon accounts.
The site’s cybersecurity team said it discovered messages from Amazon vendors soliciting positive reviews from individuals in exchange for free products. While it is unclear who owns the exposed database, some of the information was written in Chinese, leading the researchers to believe that the server is located in China.
Review and web traffic manipulation is a long-standing issue facing e-commerce platforms, as well as other corners of the internet including social media and live streaming.
Amazon has been working for years to fight the problem, having banned “incentivised reviews” since 2016.
In its 2020 Brand Protection Report, released on Monday, Amazon said it had spent over US$700 million and employed more than 10,000 people to crack down on fraud and abuse.
Last year, it prevented “six million attempts to create new selling accounts” and “blocked more than 10 billion suspected bad listings”, according to the report.
Despite those efforts and numerous lawsuits filed against businesses that paid for fake reviews and individuals who wrote them, the problem persists on Amazon and other online retail platforms.
“Review manipulation has become essential in competition between vendors within a certain marketplace,” EqualOcean‘s Platonov said. “They are almost omnipresent, with a number of social media groups, websites and even companies specialising in techniques like brushing and leveraging ample networks.”
As more Chinese vendors expand overseas, the problem could exacerbate.“While this phenomenon is rather global, in China – the world’s largest e-commerce market – it’s especially widespread,” Platonov said.
Additional reporting by Jane Zhang