Tag Archives: Amazon

Shenzhen to stay ‘neutral’ in Amazon dispute

Shenzhen’s city government has apparently decided to not intervene in the blowup that has been taking place between Chinese cross-border e-commerce firms and Amazon, the American giant.

According to sources quoted by SCMP, the city has been turning down requests to back thousands of vendors’ legal actions against the US company. The same official told the merchants that the government cannot help their cause if they cannot prove that no rules of the US e-commerce platform were violated, these sources said. The government, however, will assist the affected merchants by introducing them to legal counsel.

What the report does not mention is that the city government has been massively supporting all of these companies while they were busy building up their businesses on Amazon, providing subsidies, cheaper office and warehousing space, and export rebates. It does note, however, that once the storm broke over how these companies had been flooding Amazon with fake user reviews, the city government decided to grant them a subsidy of 2 million yuan for each independent online store.

Shenzhen is home to more than 40,000 firms involved in cross-border e-commerce, accounting for about 35 per cent of the entire sector across mainland China.

Amazon crackdown hits cross-border traders

Crackdowns against unscrupulous businesses aren’t only happening on one side of the Pacific. In China, more than 300 companies are reeling from bans placed on them by Amazon this week, as this insightful article from Pandaily explains.

The news is likely to have sent shockwaves through the Greater Bay Area, which is the biggest and fastest growing region in China for cross-border e-commerce. As recent recruitment data shows, Guangdong firms engaged in direct sales outside of China have been by far the country’s biggest recruiters in this space. Moreover, cross-border e-commerce has been seen as a growth driver for the economy in both the short term, as foreign buyers cannot attend trade fairs in China, and over the longer term, as China seeks to use technology to transform its economic structure.

The companies in question were banned for violating Amazon’s rules on fake reviews.

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