Amazon’s crackdown on Chinese sellers

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Amazon has suspended hundreds of top Chinese sellers in the past two months. The company appears to barely enforce its rules for gross policy violations, such as manipulating customer reviews. Tactics that some of these salespeople have been using for years.

Mpow and Aukey were the first major sellers suspended at the end of April. According to data from Marketplace Pulse, the list has grown to nearly 300 individual seller accounts (all based in China) and includes dozens of previously top-selling items. The total annual sales of suspended sellers exceed $ 1 billion.

Fairywill’s electric toothbrush, for example, has been in the top five on Amazon for at least three years. He had amassed over 75,000 reviews with an overall rating of 4.5 out of 5 stars. It had more reviews and regularly came over more expensive competitors from established brands like Philips and Oral-B.

Fairywill is now one of the suspended brands. Unlike most Amazon pendant lights, these will also be noticed by consumers – the toothbrush has been named one of GQ’s ’13 Best Electronic Toothbrushes of 2021′, as featured by hundreds of other publications. The GQ article referred to reviews on Amazon and cited one.

“Made in China, sold on Amazon” is a big part of the Amazon marketplace. Recent suspensions will not have a significant impact on its momentum – suspended sellers represent a tiny fraction of the total number of China-based businesses on Amazon. Nonetheless, the stories of Mpow, Aukey, VicTsing, Taotronics, RavPower, Fairywill and many more sent shockwaves through Chinese seller communities.

A few of the suspended sellers have already announced layoffs and even bankruptcies. This will inevitably cause many others (and sellers outside of China) to reassess their Amazon strategy. Some of the Amazon seller aggregators have recently started to evaluate and acquire sellers in China; they too are reviewing their due diligence processes.

Amazon said that in 2020, they “stopped over 200 million suspected fake reviews before they were seen by a customer.” However, automation does not detect cases like sellers adding product inserts with a gift card offer in exchange for a review or groups of discounts on social media. The 200 million fake reviews were the long tail, but it missed most of the top sellers’ fake reviews until two months ago.

The suspended brands were both decent products and relied on illegal tactics to stay ahead of the competition. They didn’t outsmart the Amazon system to sell worse products. They tricked the system because they probably thought that if they didn’t, others would. Amazon’s ineffective market surveillance enabled this. And it worked; for many years. New York Times wirecutter recommended Mpow, CNET suggested RavPower, and GQ liked Fairywill. Until they left Amazon.


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