‘Made in China, sold on Amazon’ community seeks to cut reliance on US e-commerce giant, trade group says
- Chinese merchants are seeking alternative online retail marketplaces to reach overseas consumers amid Amazon’s crackdown on platform violations
- Some of these merchants have started to invest in AliExpress, eBay, Shopify and other international online retail platforms
“Amazon is determined to regulate sellers [on its platform], especially after the influx of Chinese merchants in the past few years,” Wang said on Tuesday. “Their rules will only become more stringent.”
As more Chinese merchants have flocked to international retail sites like Amazon and eBay to reach additional consumers, some have brought with them grey area practices common in Chinese marketplaces. These include making up fake reviews and inflating sales numbers, according to industry insiders.
Wang from the Shenzhen trade group said it was fairly common for Chinese vendors to offer cards or gifts to consumers in exchange for good reviews. She described Amazon’s crackdown as “unreasonable” and not completely justified.
“These practices have been around on the platform for over five or six years … but Amazon only chose to stamp it out when Chinese brands grew rapidly on foreign platforms,” Wang said.
She indicated that the Covid-19 pandemic put the online shopping trend on the fast track in the US and Europe, where consumers used to favour shopping in bricks-and-mortar stores. “Manufacturers and suppliers in China, which has long been the world’s factory, have been eyeing a shift in shopping behaviour to venture abroad,” she said.
“We are about to witness other platforms compete to do business with Chinese merchants who have been driven away by Amazon”, Wang said.
Canadian e-commerce platform Shopify, for example, allows third-party vendors to keep all revenue from the first US$1 million they make on its app store, according to its announcement in June. It has also cut commission fees to 15 per cent, down from 20 per cent, for stores with more than US$1 million annual sales.
Chinese merchants, however, have borne the brunt of US e-commerce giant Amazon’s crackdown against paid reviews and other violations.
At least 50,000 Chinese seller accounts on Amazon have been negatively affected by the crackdown since May, which has caused a loss of more than 100 billion yuan for the “Made in China, sold on Amazon” community, according to the Shenzhen trade organisation’s estimates in July.
The affected Chinese vendors are now scrambling to get the ban lifted and their inventory returned by Amazon warehouses, but none have succeeded so far, said Wang.
In June, Amazon said in a statement that the sweeping removal of third-party sellers for review manipulation was necessary to protect consumers. “To help earn the trust of customers, we devote significant resources to preventing fake or incentivised reviews from appearing in our store,” the company said.
Still, many Chinese merchants are expected to carry on at Amazon, despite its rules.
“One member told me they’re opening hundreds of new accounts on Amazon [in case they cannot get their old ones back], even though it will significantly increase its costs in terms of compliance and accreditation,” Wang said.