Sometimes Business Is Just Business

Screenshot of Amazon home page

THERE IS HARDLY an aspect of business these days that does not trip over the deteriorating relations between Washington and Beijing.

Take fake and paid-for customer reviews on the US e-commerce platform Amazon. The US company has been waging war on these for years but since May has removed some 50,000 Chinese e-retailers from its marketplace, citing their attempts to solicit them.

The moves have cost the merchants an estimated $15 billion in lost sales. One of the largest companies affected, Shenzhen Youkeshu Technologies, which has 340 Amazon stores, said the US company was also holding onto $20 million of its funds and inventory.

The instinctive response from China has been that it must be the US government that is behind Amazon’s actions, a response reinforced by Amazon this time not restoring banned stores after the payment of a fine and a promise of future good behaviour.

Thus some of the companies are turning to Beijing for help. Last week, Li Xingqian, a senior official in the Ministry of Commerce, acknowledged Amazon’s decision and said that China would protect its companies ‘legitimate rights and interests.

Cross-border e-commerce has grown into a $260 billion industry for Chinese firms, boosted by the Covid-19 pandemic. Fake and paid-for reviews are common in domestic e-commerce, but this ‘Chinese solution’, as Li euphemistically called it, does not play well in current unfavourable climate in the United States towards Big Tech.

Quite how Beijing can come to its e-tailers’ aid is far from clear, given its current issues with the tech sector’s alleged abuses towards consumers.

Chinese firms could adopt an ‘American solution’ — lawsuits. However, plans by a group of some 20 mid-sized and large companies operating in the ‘made in China, sold on Amazon’ market to file a joint lawsuit against the US company broke down last week after the sellers could not agree on the end goal of any lawsuit. Further, Amazon’s terms and conditions for participating in its marketplace ban merchants from taking class-action suits against it.

In the current febrile atmosphere surrounding US-China relations, it is always easiest to suspect political machinations, but sometimes business is just business.

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Filed under China-U.S., Trade

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