There will be no intervention by the Shenzhen government in regards to the Made in China, sold on Amazon dispute between locals and the US e-commerce giant according to a new report.
According to the report, officials from Shenzhen’s Commerce Bureau (SCB) declared the government’s resolve in order to remain neutral on the issue during a meeting held with merchants last Friday. The officials also turned down requests that the city supports vendors’ legal action against Amazon according to an anonymous source.
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, the sources said. The government, however, will assist the affected merchants by introducing them to legal counsel.
While questionable practices like paying for positive reviews often go unchecked on Chinese e-commerce platforms, Amazon kicked off in May an extensive clean-up campaign targeting such activities. The crackdown has affected thousands of merchants, according to a report in July by the trade group Shenzhen Cross-Border E-commerce Association.
Requests for comment on the issue from the Shenzhen Commerce Bureau didn’t yield any response.
However, there are thoughts that the neutral stance of the SCB could have prompt Chinese online merchants to accelerate their efforts to seek another e-commerce platform to sell their goods.
The new campaign to get rid of paid reviews has affected a number of prominent Chinese brands such as Aukey, Mpow, and over 340 stores owned by Shenzhen Youkeshu Technology Co. Youkeshu said more than 130 million yuan of its funds have been frozen by the US e-commerce giant.
The Shenzhen government earlier this month offered cross-border e-commerce merchants a subsidy of 2 million yuan for each independent online store, as Amazon continued with its crackdown on review fraud in its platform. Known as China’s Silicon Valley, Shenzhen is home to more than 40,000 firms involved in cross-border e-commerce, accounting for about 35 percent of the entire sector across mainland China.
Although some online merchants may disagree, the Shenzhen government’s stance is in line with that of China’s Ministry of Commerce.
According to the director of the Ministry of Foreign Trade Department Li Xingqian, the obvious differences in laws, cultures, and acceptable business practices have caused Chinese companies a lot of challenges in their cross-border dealings. Xingqian made it known that China would help its companies comply with international standards and protect their “legitimate rights and interests.”
Amazon and eBay are two of the e-commerce platforms now used by many Chinese merchants in order to reach their overseas customers however, the change in business practices between the western platforms and Chinese platforms such as Alibaba is quite obvious.
These include making up fake reviews and inflating sales numbers, according to industry insiders.
AliExpress is another alternative platform that has international reach and these Chinese merchants won’t mind switching as reports say many of these merchants are already investing more on other online retail platforms as well.