I decided to fact-check Piyush Goyal's outburst against Amazon a week ago, and realised that he might have a point or two. A thread about Amazon's trade practices:
scmp.com/week-asia/econ…
scmp.com/week-asia/econ…
Over the last one week, I spoke to numerous traders as well as sellers who sell on Amazon and Flipkart. Flagging major issues they raise: Amazon Global owns 24% stake in two of the biggest sellers on Amazon-Cloudtail and Appario. Here's why this gets problematic:
Each product is sold by multiple sellers at different prices. Sellers claim that Amazon has been manipulating the listings to push products sold by its own sellers right up. So, when you try searching for a product, most chances are the first few will be products sold by Amazon..
Amazon claims it does not allow for the manipulation of its search results. But traders don't believe it. You can figure it for yourself the next time you look for a product on Amazon. That brings us to the second problem--Amazon's private brands.
These include brands like Amazon Basics and Solimo, which basically manufacture. Traders say it suits Amazon to manipulate its algorithms to ensure that these brands/products get most exposure and that traders' products lose out.
Goyal also said Amazon's $1 bn investment was to cover its losses. Traders and industry insiders said Amazon would, often, sell below cost price, even if it means making losses in short-term. Consumers benefit but traders who don't have pockets as deep as Amazon unable to compete
Here's the link again, in case you missed it. Hat tip to @missmishma who sparked my interest in this piece. scmp.com/week-asia/econ…
