Aukey, Mpow “Made in China” gadgets removed from Amazon
Amazon.com has prevented several prominent merchants from mainland China from selling on the e-commerce site due to alleged “suspicious behavior” in a move termed as part of a targeted crackdown on questionable business practices.
Amazon listings from Aukey, a major electronics vendor based in Shenzhen have been “Currently unavailable” for over a week. Also, most products listed on Mpow, have not been available for purchase since late April. Mpow is a major Shenzhen-based electronic vendor on the e-commerce site. Mpow is one of the main Amazon electronic stores run by ByteDance and also a Xiaomi-backed customer product firm, Patozon. Yet most products from Mpow and Aukey have not been available on the e-commerce site in recent times.
Neither Mpow nor Aukey responded immediately to inquiries from the South China Morning Post. However, an Amazon spokesman stated that the company does not comment on individual cases. He also went further to elaborate that Amazon has systems in place to detect suspicious behavior and take prompt action. Indeed, neither Mpow nor Aukey faces a fraud allegation.
Both companies are only two examples from an increasing number of Chinese vendors that have placed their products on Amazon in an attempt to reach international consumers.
China’s best sellers represented about 75% of all new merchants on Amazon as of January. This information was obtained from a recent report by consultancy marketplace pulse. The share of China-based sellers on the Amazon United States site has increased drastically to 63% in 2021 from 28% in 2019.
Some of the most successful sellers have enjoyed lucrative returns. Aukey did file for an initial public offering in Shanghai in 2019. However, the company withdrew its application last April and generated over 75 percent of its revenue from Amazon in the first quarter of 2019 and 2018 according to the company's prospectus. The company earned 5.1 billion Chinese yuan {equivalent to about 793 million US dollars} in 2018, a significant increase from 3.7 billion yuan in 2017.
Mpow in the first half of 2020 enjoyed a 29% increase in its exports to 2 billion yuan. This information was obtained from a financial statement released by Shenzhen-listed global top e-commerce, the company's previous owner.
The influx of Chinese merchants to Amazon also brings with it certain grey area practices that are common in the Chinese marketplace. These practices range from making up fake reviews to inflating sales numbers according to reports from industry insiders.
Ivan Platonov, a research manager at EqualOcean, a China-focused investment research firm, stated that the recent action by Amazon may be an attempt to send a warning message to bigger Chinese brands that the United States platforms will not tolerate any grey area practices.
The recent disappearance of product listings by Chinese brands coincides with a recent report from SafetyDetectives, an antivirus products review site that has surveyed records from a breached server that contains some 75,000 links to Amazon accounts.
SafetyDetectives's Cybersecurity team revealed that it discovered messages from Amazon vendors soliciting positive reviews from individuals in exchange for free products. While the ownership of the exposed database is unclear. Some of the information was written in Chinese, which indicates the location of the server to be in China.
Manipulating reviews and web traffic has been one of the long-standing issues facing e-commerce platforms as well as other platforms across the internet including live streaming and social media. Amazon having banned "incentivized reviews" since 2016 has been working to fight the problem for years.
The company stated in its 2020 brand project report that it has spent over 700 million dollars and employed over 10,000 people in an attempt to crack down on fraud and abuse on its platform.
Just in the last year the company successfully prevented about 6 million attempts to create new selling accounts and also blocked more than 10 Billion suspected bad listings according to the report.
In spite of these efforts and countless lawsuits filed against businesses that have solicited fake reviews and the individuals who wrote those reviews, Amazon as well as other online retail platforms still face this persistent problem.
Platonov also inferred that an increasing number of vendors continue to see review manipulation as an essential factor in the competition between vendors within a certain marketplace. These vendors appear to be everywhere with numerous social media groups, websites, and companies specializing in techniques used for leveraging on networks.
Platonov said that with more China-based vendors expanding across international borders this problem could worsen. While this issue is indeed a global phenomenon, China being the world's largest e-commerce market has the most common and widespread occurrences.
Source