[V.Narayan]

Amazon copied products and rigged search results to promote its own brands, documents show

https://www.moneycontrol.com/news/bu...w-7578561.html

A trove of internal Amazon documents reveals how the e-commerce giant ran a systematic campaign of creating knockoff goods and manipulating search results to boost its own product lines in India - practices it has denied engaging in. And at least two top Amazon executives reviewed the strategy.

Amazon.com Inc has been repeatedly accused of knocking off products it sells on its website and of exploiting its vast trove of internal data to promote its own merchandise at the expense of other sellers. The company has denied the accusations.

But thousands of pages of internal Amazon documents examined by Reuters – including emails, strategy papers and business plans – show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company’s largest growth markets.

The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform. The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results so that the company’s products would appear, as one 2016 strategy report for India put it, “in the first 2 or three … search results” when customers were shopping on Amazon.in.

Not sure what, if anything, will come out of this. Excess power in the hands of a Govt is bad enough. But power in the hands of a commercial organization is worse. And that is the direction Amazon, FaceBook, Walmart are headed. Sadly 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. Now this might sound like an extreme view but I believe it is directionally correct.

[tsk1979]

Originally Posted by V.Narayan

Amazon copied products and rigged search results to promote its own brands, documents show

https://www.moneycontrol.com/news/bu...w-7578561.html


Not sure what, if anything, will come out of this. Excess power in the hands of a Govt is bad enough. But power in the hands of a commercial organization is worse. And that is the direction Amazon, FaceBook, Walmart are headed. Sadly 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. Now this might sound like an extreme view but I believe it is directionally correct.

Counterpoint, does every retailer not do this? For example in a supermarket in USA, you will find house brands placed prominently next to name brand items at a cheaper price.

Eg Kellogs oats cost 4.99$ for the big tin. Signature Oats (Safeway brand) is placed prominently next to it at $2.99 and often on a shelf at eye level

Walmart does this too.


Costco does it with the Kirkland brand. The Kirkland chicken drumstics are placed next to foster farms drumsticks in the meat aisle
Potato chips are placed at a more prominent place than Lays.

Every brick and mortar retailer in the US does this, giving easier access to their house brands.

I do not have much experience in multi brand retail in India, though from my limited experience in Big Bazaar there house brand clothes were placed more prominently to very similar name brand stuff. Same with Shoppers stop where this was the case.

So what Amazon is doing is not unusual or different. Its just that they are doing it online

[Samurai]

Originally Posted by tsk1979

So what Amazon is doing is not unusual or different. Its just that they are doing it online

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, even if next to the house brand. The power of brand can make the product sell as long as it is visible to the customer. I remember buying known brand over Kirkland Signature myself. Otherwise the brand will threaten to remove their products from that super market chain. There are even spies from brands who walk around watching the customers shop to understand consumer behavior.

But Amazon poaches on successful small firms that don't have any brand power to fight back and win their customers back. There is no way to police what Amazon does to the small vendors.

[condor]

Originally Posted by Samurai

But Amazon poaches on successful small firms that don't have any brand power to fight back and win their customers back.

From what I have read, this is the secret of Amazon Basics products. Rip-off's. The story in the above link is from last week, about the practice in India. But that is what they seem to have been doing in US too, and similar articles about this have come out earlier.

[One]

Originally Posted by tsk1979

Counterpoint, does every retailer not do this?

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,

Actually is it the same thing, just a variant of it. Without taking specific names where it gets into murky territory, the entire industry of FMCG is littered with examples of the same where you can think of them as Amazon instead of the retailer. Those in the know in the industry know all about how this operates.

It is easier to give a known example unlike cases mentioned above. There is a reason that most markets in the world have two Cola brands and there is a reason why even as affluent a person like Richard Branson with marketing machinery could not succeed with his Cola brand.

Originally Posted by Samurai

But Amazon poaches on successful small firms that don't have any brand power to fight back and win their customers back. There is no way to police what Amazon does to the small vendors.

This is replication of offline behaviour which happens all the time in businesses in not just B2C but also B2B environments. A large business can act as a channel partner for smaller businesses (equivalent to an online platform) and can switch off the partnership (sometimes acquire it under duress). Just that it is easier to prove it in an online model as compared to offline model. This behaviour was true of the Oil Barons in US but it kind of is typical business behaviour from all history where crushing competition did not mean "do better" but more like "do worse unto them". Across the world, this has been the genesis of our distaste and suspicion for "large businesses" , but manifested badly in India (reading about JRD's interactions with our first PM kind of shows the disposition towards businesses in India).

Europe is obviously looking at extreme strictness at these businesses to the point of preventing innovation, US is looking at it in another way (so far), the middle path obviously is something not easy to define and this is a text book example of why regulations get introduced in the first place.

But to summarise, it is the same thing being done by Amazon which has been done by any entity which held power in a market and this is behaviour across history, not just recent corporate history. And I am not sure that a stick works well all the time.

[GTO]

Thanks for sharing, V.Narayan! Moving your post out to a new thread.

@ BHPians, if you should spot any good post in an existing thread that deserves its own new thread, please report the post and we'll move it out for greater visibility.

Thank you!

[aargee]

Originally Posted by V.Narayan

Amazon copied products and rigged search results to promote its own brands, documents show

I've been observing this for over 3-4 months now; offlate there're many products such as Solimo comforter, Symactive clothing, Presto cleaner, Symbol shoes are the ones to appear often; guess what? They're often the cheapest.

I was beginning to wonder if Amazon had contracted the same Chinese companies that made products for leading brands but to make a slightly economical (read inferior) products only to be labeled as one of their own brands.

If they can do the above, for sure, Amazon can certainly promote their own products. After all, its their own store & they're promoting their own products & can justify what's harm in it? They're obviously selling other products & brands as well just that, they appear a little below of the search list randomly.

In 2019 Oct, when we were searching for front loading WM, I was surprised to see Amazon Basics front loading WM being sold alongside of IFB, Siemens & Bosch. What was surprising is that, how come Amazon started manufacturing WMs. And the prices? 23K compared to IFB's 32K for near identical capacities. However, when probed a little deeper on the specification, the top spinning speed of Basics was 800 RPM compared to 1200 RPM of IFB (Bosch still had 800 or 1000 I think at that time). This was one point that I was specific, not sure how much more features were being compromised from unsuspecting buyers.

Talking about Solimo comforter, has one of the highest rating & a size for double bed costs as low as ~1500 (1419 on lightning sale) at the time of writing; and looks fabulously beautiful as well for 200 GSM!! Spaces or any other reputed brand from Home Center, normally sells for nothing less than 2.5K for a very flashy material. A decent one costs nothing less than 3-4K. Forget rigging the search, I'm having a suspicion on rigging the ratings as well.

[shancz]

Originally Posted by aargee

- I was beginning to wonder if Amazon had contracted the same Chinese companies that made products for leading brands but to make a slightly economical (read inferior) products only to be labeled as one of their own brands.

- Forget rigging the search, I'm having a suspicion on rigging the ratings as well.

- Most likely, Flipkart already does that but their description already contains the name of the manufacturer whose products you can also see in the search results. Example Patelraj clothes dryer also sold as Flipkart Homes. Same price but maybe better deals during sales.
Ditto for ACs, washing machines etc. IIRC Midea is a Flipkart brand or maybe some other, can't recall.
Big bazar does the same with their Koryo range I think.
Multiple other products are also evident just by glancing at the design but at least they mention that.

- Amazon ratings are doubtful.
They have disabled me from rating anything with no reason given. No appeals either. So after that I use them only for stuff I can't find anywhere else.
Ratings are the only way I can gauge a product online else its just a leap of faith.

[vigsom]

Originally Posted by aargee

suspicion on rigging the ratings as well

I've stopped getting carried away by ratings after a recent awful experience with a service provider who was rated 4.8, with over 150 respondents on Google. I, in fact wanted to report this guy to Google showing them how faulty their rating system can be. Having this guy blacklisted is still on my agenda, but don't know how to go about it.

On these on-line sites, I generally look for the worst ratings and then deduce how much of it is true and how much is fabricated. Also, conservative ratings like 4 on 5 with some pics and sensible reviews help take an informed decision on purchases. 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.

[Thilak29]

A well-known design firm Peak Design accused Amazon of copying their designs and reusing them in the Amazon Basics line of products.


http://bit.ly/AmazonCopies

https://youtu.be/HbxWGjQ2szQ

[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.

Originally Posted by vigsom

On these on-line sites, I generally look for the worst ratings and then deduce how much of it is true and how much is fabricated.

+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.

[MaheshY1]

They are doing what every grocery chain brand has been trying to do for the last 2-3 decades. Literally, every big brand of grocery story has their home brand product, which they're trying to promote by placing them at the eye-level shelf, giving them more breathing room, etc. Amazon just did the same thing and succeeded.

Based on my experience, the Amazon brands are reasonably priced and offer acceptable quality. I had awful experiences with other products (not top-notch recognizable brands) and even with sellers who want to manage their own shipping. I guess the success of their home brand products is not just because of the search results placements, but mostly because of the consistent quality - of product, delivery experience, packaging, timeliness. This is also the reason behind McDonald's success. The McD experience is not all that great but it's consistent. So, it comes across as a safe choice over street food or small restaurants when travelling.

Amazon offer value. That's the bottom line. What bugs me more than promoting their brand products is their interfering with Reliance - Future Group M&A and trying to stop it. Stifling the competition is bad for consumers.

[sgmuser]

Originally Posted by V.Narayan

Amazon copied products and rigged search results to promote its own brands, documents show

https://www.moneycontrol.com/news/bu...w-7578561.html


Not sure what, if anything, will come out of this. Excess power in the hands of a Govt is bad enough. But power in the hands of a commercial organization is worse.

Many brick & mortar retailers do this. Big Bazaar et all. You hardly find other prominent branded items (even for Dhal etc.) but rather find only BB's branded and packed ones.

But I question their might and the search algorithm to push their agenda in their search results. You have to be specific and smart to find what you want rather buy in to their tactics. In that way, what Amazon doing is wrong for sure. But how to fix this? It is their business model. Almost all of the online marketplaces has similar tactics in one way or other. Amazon has to be banned to have their own brands like Symbol or AmazonBasics which directly compete with their sellers in lower price? I don't think so. This is competition. Competition is good for consumers. Usually, I think, their brand products are of good quality. If they use their power to produce knock off and the seller could not complain about it (fear of loosing a selling platform) then, that needs to be investigated. There may be other ways Amazon might abuse their position and money clout.

[kayak29]

I think the challenge is because of the premise with which Amazon launched its India operations. Given FDI restrictions in retail, Amazon launched as a marketplace where Amazon India does not own any inventory nor does it sell directly to the end customer. All of it is done through sellers on the platform.
As a marketplace, if one does not have equitable terms for all sellers and starts favouring a few, it is bound to create tensions. The same seems to be happening here. Amazon seems to have taken best selling products from some of its sellers (for some, a single SKU could be contributing 50-60% of their overall sale) and asked its 'preferred sellers' to copy them and sell at a lower price under the Amazon private label.

[dragracer567]

Originally Posted by V.Narayan

Amazon copied products and rigged search results to promote its own brands, documents show

I am quite perplexed on why people are surprised that Amazon is doing this. I mean, wasn't it obvious before this report came out? They have been doing this in the US since a very long time and even in Europe - the bastion of regulations, so wasn't it obvious that they were doing this in India as well?

Politicians in all the countries where Amazon operates have failed to rein in the giant. Even in India, despite all the jingoism regarding the unflattering articles in the Washington Post - owned indirectly by Jeff Besos, the preference for local monopolies (like JM) & the 'East India Company' comments, there as been no real effort to rein Amazon in, no doubt because India needs the investments in a post-pandemic economy. Effectively, governments have been held hostage because of the scale of investments & jobs that Amazon holds, effectively Amazon has become a state in itself answer-able to no-one. Mind-you, this is true for most tech-companies but its most profound with Amazon as its more visible in the real world.