Amazon Copied Products and Rigged Search Results To Promote Its Own Brands: Report
Moneylife Digital Team 13 October 2021
A trove of internal documents from Amazon reveals how the e-commerce giant ran a systematic campaign to create knockoff goods and manipulate search results to boost its own product lines in India—practices it has denied engaging in, says Reuters.
 
According to the report, the documents reveal how Amazon's private-brands team in India secretly exploited internal data from the e-commerce giant to copy products sold by other companies and then offered them on its platform.
 
It says, "The employees also stoked sales of Amazon private-brand products by rigging Amazon's search results so that the company's products would appear, as one 2016 strategy report for India put it, 'in the first two or three … search results' when customers were shopping on Amazon.in."
 
The report also mentions how employees of Amazon studied proprietary data about other brands on Amazon.in, including detailed information about customer returns intending to identify and target goods—described as 'reference' or 'benchmark' products—and 'replicate' them.
 
Quoting the document, "India Private Brands Program," the newswire says, "It is difficult to develop this expertise across products and hence, to ensure that we are able to fully match quality with our reference product, we decided to only partner with the manufacturers of our reference product." 
 
Last year, a sensational investigation by the Wall Street Journal also had found that Jeff Bezos-owned Amazon is allegedly using data from its vast network of third-party sellers to help develop its private-label products, an allegation the e-commerce behemoth has vehemently denied.
 
The e-commerce giant has long asserted that it doesn't use the information it collects from the site's third-party sellers when it makes and sells its products.
 
In a tweet, Amazon had denied the allegations, saying they "don't use individual sellers' data to launch private label products (which account for only about 1% of sales)."  (Read: Amazon using 3rd-party sellers' data to build its future products: Report)
 
Earlier in February 2021, a report had revealed how Amazon dodged Indian regulators. The report says that two more sellers on the e-commerce giant's India platform – merchants in which Amazon had indirect equity stakes – accounted for around 35% of the platform's sales revenue in early 2019. It means some 35 of Amazon's more than 400,000 sellers in India at the time accounted for around two-thirds of its online sales, it added.
 
"Amazon favoured big sellers on its India platform – and used them to manoeuvre around rules meant to protect the country's small retailers from getting crushed by e-commerce giants, internal documents show. As one presentation urged: 'Test the Boundaries of what is allowed by law'," the report says. (Read: Amazon Favoured Big Sellers on Its India Platform: Report)
 
The rival products Amazon targeted also included other brands popular in India. A 'reference brand' for pots and pans was Prestige, one of India's largest kitchen equipment companies. The benchmarks included Peter England and Louis Philippe for men's shirts, both made in India by conglomerate Aditya Birla Group.
 
Chandru Kalro, managing director of TTK Prestige, which owns the Prestige brand in India, told Reuters, "We have no knowledge of us being a 'reference brand' for Amazon, and we don't know what it means to be an Amazon reference brand."
 
Earlier in February this year, the Confederation of All India Traders (CAIT) has asked commerce minister Piyush Goyal to investigate the role of Amazon supplier Cloudtail India Ltd and Appario Retail (P) Ltd.
 
It added that these together control 80% of business on the Amazon marketplace. According to law and policies, the marketplace (Amazon) should not have relation or control over the retailer (Cloudtail); since it fully controls these retail companies. Thus, Amazon's 'marketplace' narrative is a mere myth, CAIT says. (Read: Role of Amazon supplier Cloudtail India requires investigation: CAIT)
 
Comments
saharaaj
2 weeks ago
i have noticed some strange thing on Amazon search . in the first display the product price is low and then in subsequent display product price keep on increasing . if search is repeated after some time ( days) Cheap products viewed earlier do not make it to screen. Such finding make Amazon a forceful candidate for Nobel Prize in economic on customer behavior
Pawan Sood
2 weeks ago
I prefer Cloudtail and Apparrio while ordering on Amazon because of the trust that they will ship genuine products. Many buyers would be preferring them for the same reason and so there share would be large than other sellers on Amazon.
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