Amazon made heavy moves, more than 50,000 Chinese sellers were blocked, and the loss exceeded 100 billion. The Ministry of Commerce responded

Looking back at the development of the cross-border e-commerce industry, some people in the industry are not surprised by the Amazon “storm” sweeping all Chinese sellers. There will be various new situations in the market.

World e-commerce companies look at China, and Chinese e-commerce companies look at Shenzhen. On Amazon, 70% of sellers are from China; among China’s cross-border e-commerce, Guangdong sellers can account for 70%, of which 50% are from Shenzhen.

Due to China’s outstanding performance in fighting the epidemic, the domestic cross-border e-commerce industry has ushered in a large wave of development opportunities. “Buying a luxury house in Shenzhen Bay in one year and Xi Titian car are not a problem.” Words such as these frequently appear in the public eye.

Beginning in 2020, cross-border e-commerce has entered the stage of intensive IPOs. Cross-border communication , contact and interaction , Lanting Jishi , and Xinwei International have been listed successively. In the first half of 2021, many cross-border e-commerce companies have announced their IPO plans. .

However, since May of this year, Amazon’s “title controversy” has come particularly violent, affecting more than 50,000 Chinese businesses. Nearly 340 sites of Shenzhen’s super-large seller Youkeshu have been blocked and 130 million yuan in funds have been frozen. This has become the most severe case of Amazon’s crackdown on domestic sellers.

According to Amazon, the vast majority of the reasons for the ban are violations such as “improper use of the review function”, “soliciting false reviews from consumers”, and “manipulating reviews through gift cards” by the platform.

In response, the Ministry of Commerce stated that it will provide assistance for enterprises to improve their risk control level, strengthen the connection with international economic and trade rules and standards, and resolutely support enterprises to take reasonable measures to protect their legitimate rights and interests.

Over 50,000 sellers were blocked, and the amount of loss exceeded 100 billion

According to the new financial network reported that the scope of the centralized management platform continued to expand since the beginning of May, a large number of Amazon Seller is shut shop title. On July 21, a person close to Amazon stated that the banning storm was not aimed at Chinese sellers and did not involve Sino-US relations. Most of the banned shops were businesses that repeatedly committed violations and “knowingly committed”.

Beginning in May 2021, a large number of branded stores operated by Chinese sellers have been closed down, involving many well-known top cross-border sellers in South China, such as Paterson, Aoji and Zebao. It is reported that the non-compliance under Amazon’s heavy-handed governance mainly involves false comments. That is, the so-called “swiping orders and speculation” on domestic e-commerce platforms.

At the beginning of May, a large number of brand stores including Mpow, VicTsing, Austor, TopElek, Atmoko, TaoTronics, RAVPower, Apeman, Homfa, etc. were closed down, which involved many well-known South China such as Patosun, Aoji, Zebao, etc. Top sellers. Since June, many well-known brand accounts of top sellers have been blocked, a large number of products have been removed, and even billion-level sellers have been blocked during Amazon Membership Day. On July 8, Yukeshu was banned, nearly 340 sites were blocked, and 130 million yuan of funds were frozen. This has become the most severe case of Amazon’s crackdown on domestic sellers.

In addition, this round of “titles” involved dozens of billion-level top sellers. The tail wave also touched CLP Hengye, Shenzhen Ruitai , Shenzhen Hess, Guangzhou Taiyang, Mengzhituo, and Wofeng. Outdoor, Hangya E-commerce, Lebuy Trading, Iyaxun, Xibei Electronic Technology, Klassie, Hede Tiancheng Technology, Rafal, Yishan E-commerce, Guangmian Technology, Anbo Technology, Ovoton A large number of waist sellers such as Technology, Detuo Electronic Technology and so on.

According to a report from the Southern Metropolis Daily, according to statistics from the Shenzhen Cross-Border E – Commerce Association (hereinafter referred to as the “Association”), in the past two months or so, more than 50,000 Chinese sellers have been blocked on the Amazon platform, which has caused industry losses. Estimated to exceed 100 billion yuan.

The top e-commerce company has 340 sites blocked, and the listed company behind it may lose money

According to the ” Daily Economic News ” report, a few days ago, Tianze Information (300209, SZ) issued a reply to the Shenzhen Stock Exchange’s letter of concern. Among them, the subsidiary You Keshu was suspected of violating Amazon platform rules, and nearly 340 sites were blocked by the platform.

In this regard, Tianze Information admits that it ignores the compliance of platform store operations and has established a special working group to communicate with the platform and organize complaints. At the same time, it has raised the proportion of the corresponding inventory depreciation reserves, and the balance is about 500 million to 600 million yuan. . Tianze Information predicts that in the first half of this year, the overall revenue of the subsidiary Youkeshu will drop by about 40%-60% year-on-year, and the company is at risk of performance loss.

As one of the leading cross-border e-commerce companies, Youkeshu was established in 2010 and was acquired by Tianze Information from 2017 to 2019. Its main model is B2C, relying on third-party e-commerce platforms such as Amazon, eBay, Wish, and AliExpress to sell products made in China to the world.

Since 2019, cross-border e-commerce business has become the main source of income and profit of Tianze Information, and has become the target direction of the company’s transformation.

In 2020, the new crown epidemic has swept the world, catalyzing the rapid increase in online consumption penetration, and the domestic cross-border e-commerce export industry has achieved counter-trend growth. Affected by this, in 2020, Tianze Information’s cross-border e-commerce export business achieved operating income of 4.748 billion yuan, a year-on-year increase of 20.16%, and revenue accounted for 94.48%. Among them, Amazon’s sales revenue is 1.525 billion yuan, much higher than other third-party platforms, with a revenue share of 32.12%.

However, cross-border e-commerce, which was originally a hotly developed one, “changed abruptly” in July this year. Tianze Information stated in the “Announcement on Major Subsidiary Matters” that due to suspected violations of Amazon platform rules, Youkeshu has added approximately 340 sites blocked or frozen in 2021. As of July 6, there are known Keshu is suspected of freezing funds of approximately 130 million yuan.

In this regard, Tianze Information acknowledged in its reply announcement that while the pursuit of market share continues to expand, the tree has ignored the compliance of platform store operations to a certain extent, and some specific operations may be suspected of violating the operations of platforms such as Amazon. Rules, such as alleged infringement, abuse of sales ranking, abuse of ratings, feedback or comments, etc. At present, the company has established a special working group to communicate with the Amazon platform and appeal.

The development logic of savage growth has been challenged, and legal and compliant operation is the long-term solution

Looking back at the development of the cross-border e-commerce industry, some people in the industry are not surprised by the Amazon “storm” sweeping all Chinese sellers. There will be various new situations in the market.

From barbaric growth to development opportunities during the epidemic, and now with the storm of Amazon’s title to Chinese sellers, the growth logic of the domestic cross-border e-commerce circle has opened up new challenges.

According to a report from the Southern Metropolis Daily, a relevant person in charge of a Shenzhen cross-border e-commerce company revealed that, “In the early days, cross-border e-commerce did experience a period of barbaric growth, and not many people entered. The experience of domestic e-commerce has been copied slightly, and it has been transformed into overseas platform sales, and it is easy to enter the industry. Now the barriers of the industry are constantly increasing.

Compared with domestic e-commerce companies operating on platforms such as Taobao, the threshold for cross-border e-commerce is higher. It seems to the outside world that simple export trade and then selling goods on the shelves hide many complicated doorways.

Wang Xin, executive chairman of the Shenzhen Cross-border E-commerce Association, said: “Because there are too many supply chain links involved, those who do production do not understand foreign trade, those who do foreign trade do not understand e-commerce, and the younger generation of e-commerce has a relationship with the production side. The degree of running-in is not high, and cross-border means that you have to have a good understanding and mastery of foreign and local tax laws, finances, and markets.”

Among them, the law is one of the most demanding links among the many production factors of cross-border e-commerce.

Zhai Dongwei, the founding partner of Guangdong Yingzun Law Firm, said that intellectual property and tax laws are the easiest places for overseas companies to stumble. “First, in terms of intellectual property rights, due to the large gap between my country’s protection of intellectual property rights and that of foreign countries, many sellers do not pay attention to intellectual property rights. The infringement problem is so serious that foreign countries have specifically filed intellectual property rights infringements against Chinese sellers on e-commerce platforms. Litigation, the sealing of the seller’s account, and the law firm that freezes the funds have caused great losses to the seller; second, in terms of tax law, many sellers do not understand or abide by local laws and tax evasion. For example, there was a large seller some time ago because of taxation. The problem was that the French tax office required to pay 2.88 million euros in tax, and at the same time was fined 2.07 million euros.”

For sellers who rely on cross-border platforms for sales, cross-border e-commerce faces a much more complicated legal environment. Because most of its production, procurement, and operations are located in the country, it needs to comply with domestic laws and regulations; while the customer is abroad, it needs to comply with the laws of the country where the customer is located, and it is the law of many countries, because the customer is not limited to one country; At the same time, it is also necessary to comply with the policies of various e-commerce platforms, including market platforms such as Amazon, advertising platforms such as Google and Facebook, and payment platforms such as paypal. For sellers, the challenge lies in the wide range and complexity. As a seller, it is difficult to fully understand and it is easy to violate regulations.

“For violations, the platform’s punishment measures are often banning and closing the store, which is equivalent to a death sentence. Once the seller is banned by the platform, it will bring a series of problems-employee wages, supplier payment, logistics provider freight, etc.” , Zhai Weidong preached.

According to Wang Xin, executive chairman of the Shenzhen Cross-border E-commerce Association, the most urgent thing is to hope that the government will come forward to establish a Sino-US cross-border e-commerce trade representative consultation expert group to take the lead in dialogue with the Amazon platform to find the best solution. In addition, guide Chinese sellers to operate in compliance, especially when Chinese cross-border companies rely heavily on Amazon, PayPal, Facebook, and Google platform traffic to open up the global market, do not touch the red line of the platform. Legitimate and compliant operation is the way to long-term development.

Ministry of Commerce: will provide help to support enterprises to safeguard their legitimate rights and interests

According to CCTV News, at a press conference held by the Information Office of the State Council on July 22, Li Xingqian, Director of the Department of Foreign Trade of the Ministry of Commerce, responded to Amazon’s recent banning of a large number of sellers, and some Chinese sellers and companies have been greatly affected. .

Li Xingqian mentioned that at the same time of rapid development, cross-border e-commerce companies have more diversified export channels. Some rely on large-scale e-commerce platforms to carry out their business, some self-built independent stations to open up the market, and there have also been issues such as live streaming and big data. New business models such as marketing. A number of Chinese companies and Chinese brand was recognized by the international market, “China Experience” “China plan” has become the world’s cross-border electricity supplier development of a new kind of book, but also provides a reference for the development of the electricity supplier countries. At the same time, the Ministry of Commerce has also noticed that due to the different laws, cultures, and business habits of different countries, companies will also encounter various risks and challenges when going overseas.

Li Xingqian said that as far as I know, the behavior of some businesses is deemed to have violated Amazon’s “Code of Conduct for Sellers” and other format terms, and their operations are restricted. The Ministry of Commerce has always required companies to abide by the laws and regulations of various countries, respect local customs and habits, and conduct operations in compliance with laws and regulations. The Ministry of Commerce will provide assistance for enterprises to improve their risk control level, strengthen the docking with international economic and trade rules and standards, resolutely support enterprises to take reasonable measures to protect their legitimate rights and interests, promote various upstream and downstream entities to strengthen exchanges and cooperation, and jointly promote the healthy development of the industry.

Li Xingqian emphasized that, on the whole, this is a problem that has arisen in the development of new foreign trade formats, a phased “unaccustomed to water and soil”, and a “growth trouble.” In the process of learning by doing and learning from each other, I hope that the platform will cherish the important contributions made by the majority of enterprises, fully respect various trading entities, and believe that the platform and enterprises can find a solution that is both compliant and reasonable . The Ministry of Commerce will continue to pay attention to relevant developments.

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