[Theyota]

As many have said, what Amazon is doing is what traditional chain retail stores have done for decades. The only thing I would like to add is that, Japanese retailer Muji even tried to sell a store branded car sourced from Nissan.

[iamahunter]

Chroma does the same thing.

When we were looking for Microwave, the chroma executives offered a lucrative deal on one of its in-house chroma branded microwave.
Also said that as its an in-house product, the service will be better.(sales tactics)

But we did take in the plunge and its been almost 3 years now and product is working totally fine.

I think Amazon is doing no different. Offering a better deal or highlighting an in-house brand is not wrong by any means.

Either ways if you search/ask for a very particular thing or a brand, it will show it to you.

[neerajku]

Comments that such push for more margin products is fairly common in retail and hence understandable for Amazon, probably misses the point. With enormous data at their command they can really sharpen their demand projections, they will really know what customers want. While that is good and all retailers should have it but what we forget is that they are really big and have really deep pockets. They have a huge buying power, can outcompete any seller by sheer volumes of their purchase. Ideally yes it will reduce prices but will also reduce choices. In the long term such monopoly power will also reduce innovations and ultimately offer poor products and higher prices. We have seen in the pre 90s India.

[NH08]

Originally Posted by DigitalOne

Reliance Jio promotes its own brands over the known ones. For every item, the store brand (Good Life, Healthy Life, My Home, Expelz etc) item comes in the first 3, if not the top. Knowing the clout Reliance has over the govt and media, I guess this would never make it to the news.

I think everybody is aware that Moneycontrol, that published the article on Amazon, is controlled by Reliance. So, take what is written there about Amazon with a spoonful of salt. After all, Reliance wants to be a serious competitor to Amazon.

[Sran]

Most of the posters here are missing the crucial detail of Foreign Investment rules. Some are going absolute conspiracy theory way and comparing domestic business companies privileges as being against foreign companies. Please read about FDI, FII and other routes through which investments happen in India or for the matter any other country in the world before making any wrong assumptions. One must understand that there are rules especially made for Foreign investments which are different for domestic companies. It is disheartning to see educated minds here are unwilling to understand it.

Few even want to remove traders as they are "good for nothing middleman". It reminds me of one idiot theory of 150 years back which wanted to remove bureaucracy. Even Indus-Sarswati civilization had those "useless middlemen". Indus -Saraswati civilization was not agricultute based but trade based. The western most Sutkagandor(Iran border) and northern most Shortugai (Afganistan) both were trading posts. Harappa was also a Trading city. So no, one can not remove middle man on whims and fancies.

[dragonfire]

Originally Posted by NH08

I think everybody is aware that Moneycontrol, that published the article on Amazon, is controlled by Reliance. So, take what is written there about Amazon with a spoonful of salt. After all, Reliance wants to be a serious competitor to Amazon.

Ah, there lies the twist in the tale. Reliance wants the govt to use protectionism when it suits them. And the bleeding hearts cry for the small/local businesses while who actually benefits are business houses like Reliance.

Crony capitalists/socialists win every time in this country.

[EngineFirst528]

Originally Posted by condor

Ref my above post - the article was about an Amazon Basics product that was reported to be exact replica of another successful product by a small business.
+1. The negative reports are the ones that can give a better picture of the product quality. Often, the reviewer has given a bad rating for something not related to the quality itself, but things like a delay in delivery etc.

I find it very difficult to trust any ratings on Amazon. If the positive ratings can be manipulated, so does the negative ratings. A vendor's rival would be interested in doing that for sure.

[v1p3r]

I am not sure why this is of any surprise to anyone. Platforms exist as a means to collect data, and then to eventually offer a better product to their regular customers. Targeted advertising and granular customer insights are literally what the entire FAANG complex is built on. Uber has billions of hours and km of user data, which will be useful for its self-driving campaign, where it's a world leader in tech. Swiggy used all the data from loyal customers (like me!) to build inhouse brands and dark kitchens, which are cheaper and faster. Netflix is now the world's largest producer of content, outstripping the entire Hollywood studio industry. I mean, isn't it obvious?

Further, Amazon has a very interesting startup accelerator in India. They give you a bunch of stuff, including credits and sales coaching, and some capital. The contract then states that if they so choose (if they see your product doing well on Amazon), they can buy you out for the flat sum of $ 100k. Of course, Indian founders aren't stupid, so they've had nearly no signups of any importance.

Originally Posted by V.Narayan

Amazon copied products and rigged search results to promote its own brands, documents show
....
....
American society {much more than European or Indian} believes, to quote an old saying, that what is good for General Motors is good for America. And within that the only thing to aim for is shareholder valuation and profits at the expense of other stakeholders - employees, vendors, civil society, the Government etc.

Amazon's behaviour is unsurprising, and the US will take no action because their understanding of monopolistic practices is very different from the EU. In the US, as long as the customer is benefiting, there is no need to change things. In Amazon's case, there is a clear benefit to the customer if a similar product is now 20-30% cheaper.

Originally Posted by Iyencar

Amazon is a platform for selling and not a retailer. The fact is they have already been subject to an enquiry by the CCI and it was upheld by the SC when Flipkart and Amazon went to court. They have broken the law and ought to face the consequences. Saying that xyz co. in xyz country does it or the traders (a front for money laundering apparently) deserve it is doing ourselves a disservice. We complain when laws are changed arbitrarily. Let's not complain when the law is being applied uniformly.

Maybe you've missed the news about the laws around being changed arbitrarily, to favour only one local conglomerate and disallow others to proceed with doing business to the best of their ability. Or maybe you've just completely missed how laws are being changed arbitrarily in general.

Originally Posted by Iyencar

Couldn't have put it better myself:
Source

You've quoted a person (most certainly not a gentleman) who is an actual paid PR spokesperson, is known to curry favour with the high and mighty, and has been accused of sexual harassment on multiple occasions by multiple women. I would take him far less seriously than Sachin Tendulkar took the taxman.

Originally Posted by Sran

Even Indus-Sarswati civilization had those "useless middlemen". Indus -Saraswati civilization was not agricultute based but trade based. The western most Sutkagandor(Iran border) and northern most Shortugai (Afganistan) both were trading posts. Harappa was also a Trading city. So no, one can not remove middle man on whims and fancies.

Ah, never too late for the five thousand year old argument. And yet, that civilisation disappeared without a trace.

[landcruiser123]

I don't know the moral argument to this, but this is an on-going issue. I don't know how much 'copying' is an issue unless they are violating IP and patent laws.

Originally Posted by Samurai

No, it is different. Unlike Costco, Amazon can simply make your product disappear from the search results. In retail shops, the brand executives (say of Kellogg's) will visit regularly and ensure their products are properly showcased....

Costco or Walmart will sign multi-billion dollar deals with Unilever or Frito Lay company, so there is really not much choice there.

In case of Amazon India, Bombay Dyeing has enough bargaining power to make its bed linen come to the top of the search. However, smaller companies might need to pay a fee to counter the Amazon basics in-house brand.

It is worrying that Amazon certainly flexing its muscles to make small businesses pay an 'advertising fee' to promote their products is worrying.

[MegaWhat]

Picture this. A new mall has opened up in your neighbourhood. A good neighbourhood that will assure a good footfall. The owner of the mall tells potential shopkeepers to open up shop inside the building and that he’ll advertise their goods fairly across the mall. In exchange, the mall owner will take a percent of their profits.

A few months down, all shops get occupied and are doing well, and the mall owner is getting his cut as well. But he wants more. So he installs CCTV cameras throughout the mall and in shops to keep track of how many customers enter, what type of customers enter, at what time, how much time they spend in the shop, what do they pick and how much do they pay etc. He then proceeds to copy all the high moving, high margin goods that the successful shops within the mall are selling.

A month later, he opens his own shop within that same mall, right at the front door, which sells replicas of all successful goods from ALL the shops located within the mall. His shop contains everything, from washing machines to candles and clothing and bed sheets. He sells these at a significant discount. He also advertises for his own goods more prominently than he does for the other shops within the mall.

Of course the crowd starts going to his single shop leaving the others in the lurch. Those other shopkeepers still do have to pay their cut to the mall owner though. Soon enough, most of them can’t afford to pay that cut and leave the mall. The shops are almost immediately taken over by the mall owner to sell his replicas. He’s been running out of space in his single shop anyways. Another month down the line, all shops have exited and it’s only the mall owner selling all the goods in the entire building. Soon enough, he’ll have enough capital to replicate the same “business model” in another location in another mall.

Amazon isn’t an online retail shop. It’s a marketplace, like a mall. Comparing it directly to a retail outlet like target or big bazaar or the local medium size Kirana guy isn’t exactly an apples to apples comparison. There’s a massive difference of scale. Of course they haven’t done anything illegal as such. But that’s because they’re good at identifying loopholes. The law needs to catch up.

[SulemanP]

Originally Posted by vigsom

Price wise, the gap between offer prices on these sites vs local offer prices seems to be narrowing down in many branded products. I've also seen unbranded ones available cheaper locally.

Correct, Last year I wanted to purchase a mobile phone (Oppo F21) for my better half it was during one of such "Great Indian Sales" the price quoted in Amazon website was 23k, then i thought of utilizing my friendship with the Procurement team in our company. My friend got in touch with the distributor and i got the phone in 21.5k now this is with a brand. I've come to know that if you purchase branded items there you wont get sliced but if you purchase something other than branded items then there are chances that you will get sliced very nicely for e.g. i bought my daughter a popping toy from a local shop in 120 and the same stuff in Amazon was for 299 such is the difference.

Same is the case with all big retailers even Reliance Mart does this, so I believe the customer should not hurry in any purchase and buy products only after he/she is sure of right Product Quality & Genuine Pricing...

[MSC]

I live in a very small town where we just got a Vishal mega Mart and easy day couple years back, may be two years to be accurate.
This sort of things are extremely common. Just last year when the lockdown started and there was a slight crunch of supplies, both the outlets very cunningly, removed almost every big brand of FMCG and replaced them with their own products. And those products also were in monster sizes eg a 1 kg pack of biscuits or a 5 or 10 kg pack of some washing powder.
They know very well, that the poor hapless customer has no other option.

[dragonfire]

Originally Posted by MegaWhat

Picture this. A new mall has opened up in your neighbourhood. A good neighbourhood that will assure a good footfall. The owner of the mall tells potential shopkeepers to open up shop inside the building and that he’ll advertise their goods fairly across the mall. In exchange, the mall owner will take a percent of their profits.

Amazon should be allowed to restructure its business model as it deems fit as long as it honours any commitment given to the sellers. Nothing more.

If they don't like the way things are, they can build their own marketplace. Anybody can. Yeh, it is not easy, I know. Neither was it for Amazon.

[NoLurkerForLong]

Originally Posted by DigitalOne

Somehow, I fail to see what the issue is; maybe I am stupid.

In the brick-and-mortar store world this is fairly routine.

Just because it happens at place A, it is legal or nothing to talk about when its repeated in place B.

I really don't know if Amazon is violating any existing laws or not but as a society we need to talk if this behavior is something we need to regulate or leave to the market dynamics.

My personal choice is this has to be regulated. Either you be a marketplace or be the seller. If Amazon takes up both the roles then there is inherently a conflict of interest and violates the fair play in the market. Specially for a big player like Amazon (for that matter even Flipkart too) there has to be rules to follow to not take undue advantage of their oversized position in the market.

We have seen similar behavior in the cable market with Sumangali Cable from SUN TV group. They had a monopoly in TN market resulting in blackout any channel they deem as competitor making them struggle to survive at best or forcing them to bankruptcy. But fortunately the technology and market dynamics came to rescue when DTH came in. Also govt taking control of cable business brought some sanity.

[MegaWhat]

Originally Posted by dragonfire

Amazon should be allowed to restructure its business model as it deems fit as long as it honours any commitment given to the sellers. Nothing more.

Yep, legally speaking, definitely yes. Amazon isn't doing anything illegal and is free to pursue any model it deems fit (while being legal). But imagine a seller who must have signed a terms and conditions document as well while coming onboard the marketplace. He/she probably did not look for a clause that said "Amazon cannot copy your products for their monetary benefit" or something to that tune, because that generally does not happen, or is not expected from someone as big as Amazon.

Of course, we could dismiss the sellers as naive but I wouldn't do that considering the number of sellers who have lost out on their designs/products - as can be seen from the variety of products that Amazon sells under it's own brand now. On a small scale, it's something that the market can tolerate. But when a trillion dollar behemoth does this on a global level, I believe it's something to take note of and account for.