Amazon it was a little paradise for Chinese companies. In 2012, the giant actively worked to attract the best Chinese brands to its Marketplace. Between 2014 and 2015, the number Chinese sellersi has tripled, in 2017 about a third of international sellers active on Amazon were Chinese.
Chinese companies loved Amazon for several reasons: to begin with, there were virtually no barriers to entry. They could gain free access to a limitless international audience. And not only that: a product that sells for 5 yuan in China can easily be sold on Amazon for 140 yuan, which is 20-30 times as much. Many customers and huge margins, a dream come true.
But recently, the gears of this huge money machine have stopped, and now Chinese companies are fleeing the Amazon market en masse – even though it’s not exactly the store that is chasing them. An in-depth analysis from Rest of the World magazine tells it.
Since the beginning of 2021 Amazon has banned more than 3,000 Chinese companies. Their fault? They either bought the positive reviews or used unauthorized tricks to pump their feedback. As some of you will recall, it all started with a WSJ investigation into the tactics used by brands like TaoTronics and RavPower to occupy the top spots of Amazon’s internal search engine. Tactics that Amaozn seemed willing to tolerate at the time.
But perhaps the story is not so simple. Maybe it’s not just Amazon’s crusade against dishonest companies. The giant has repeated several times to target companies not only by nationality, but in China many sellers have a different opinion.
Some companies simply argue that selling on Amazon has become too clumsy: costs have skyrocketed and market constraints make selling activities very complex. In short, the era of absurdly high margins is over and many companies would start looking around. An association uniting Chinese merchants claims that Amazon has banned at least 50,000 different Chinese brands from its platform.
Whatever the cause of this rift, what is certain is that the Amazon-China axis is now in a very serious crisis.
Source: Lega Nerd