For several years, Amazon has been the primary means for Chinese businesses to sell their products directly to customers. By enabling them to circumvent intermediaries such as Walmart, Amazon presented tremendous potential.
However, Chinese sellers and Amazon have fallen out in their relationship. Today, Chinese sellers are increasingly seeing Amazon as a chokehold on their business.
Why Chinese Sellers Want to Break From Amazon.
The reasoning behind the Chinese seller’s break from Amazon is somewhat complex. The best breakdown comes from the Op-Ed titled Defusing the Risk of “Chokehold” in China’s Cross-border E-commerce channels.
The Chinese Publication People’s Daily Overseas Edition published the story by Hong Yong on March 22. Yong, an associate research fellow linked to the Ministry of Commerce, is intimately familiar with the topic.
In the op-ed, Yong discusses three reasons that Chinese sellers should leave Amazon.
- Fees – Yong states in the piece that Chinese foreign trade companies already face relatively high operating costs. The cost of increased Amazon fees seems to only exasperate the issue.
- Account Suspension – Last year, Amazon banned several of the top Chinese sellers for multiple TOS infractions. These include allegedly creating fake reviews on their products. Hong Yong cited this as a “serious blow to small- and medium-sized enterprises.”
- Availability of core consumer data – The last grievance Yong cites is the lack of availability of buyer information for Fulfillment By Amazon sellers.
He continued in the Op-Ed to praise the independence offered via establishing Chinese-owned direct-to-customer sites. He even urged Chinese sellers to make the transition from “made in China” to “Chinese Brands.”
What Does This Mean?
It is uncertain what this means for the future of Chinese sellers on Amazon. The platform remains a necessity for many Chinese sellers seeking to remain independent of foreign businesses. However, many sellers have shifted from Amazon to Walmart following the mass seller suspensions.
One thing this does mean for the Amazon Marketplace is that the number of American sellers has been gaining, and the number of new Chinese Seller registrations has dropped significantly.
This marks a significant change from the previous years where Chinese sellers dominated the market shares.
We here at Anata, as always, are watching the situation closely for any meaningful changes. Sellers looking for help with handling the turbulent Amazon Market place should contact us today.
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