Amazon Accused of Exploitation, Temu Under Fire and More News
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Another seven days have flown by, and once again we’re here with more eCommerce news. This week, a lot of companies are under fire, including Amazon and Temu. It looks like with fame, there comes a price — but didn’t we know that already? After you’re done with the article, make sure to check out last Tuesday’s WMS top tips. But right now, it’s time to catch up on the latest eCommerce shenanigans. Enjoy!
Today’s news is 1418 words and takes 6 minutes to read.
Amazon Accused of Exploiting Small Businesses
In a recent eye-opening report published 14 June 2023, Amazon has come under fire for allegedly taking advantage of small businesses. As reported by The Guardian newspaper, the report sheds light on a significant spike in fees and advertising expenses imposed on sellers. These actions have sparked concerns over Amazon’s practices towards independent sellers.
Spanning from 2017 to 2022, the report reveals a startling revelation. Amazon’s earnings from fees charged to independent sellers in Europe have tripled. Surprisingly, this growth far exceeds the sales rate, which only doubled during the same time frame.
These findings have thrust Amazon into the spotlight. They have raised questions about the ethical treatment of small businesses in its vast marketplace. The report serves as a reminder of the challenges faced by sellers who rely on Amazon’s platform. It prompts a wider discussion on the balance of power between the retail giant and its independent partners.
In light of these accusations, Amazon has responded. The company stated that its revenue growth is a result of European sellers leveraging the platform to expand their businesses. The company has emphasized its investments in supporting the growth of its selling partners.
Amazon has also highlighted that services such as:
- storage,
- picking,
- packing,
- delivery,
- and advertising is optional for sellers.
Sellers choose to utilize these services based on the additional value they can bring to their businesses.
And what is your opinion on this matter? Share your thoughts in the comments below. Also don’t forget to check out last week’s News Digest article, where we share our thoughts on Apple taking over Amazon.
Big Retailer News
Temu Under Fire for Selling Products Linked to Forced Labor
In a recent discovery, a global supply chain verification firm has brought concerns to light. It seems that products originating from China’s western province of Xinjiang, despite being subject to a U.S. ban due to forced labor concerns, are finding their way into the hands of American consumers. All through the online shopping platform Temu. This revelation adds to the growing debate on ethical sourcing and labor practices in the global supply chain.
Temu, a subsidiary of PDD Holdings Inc. and affiliated with the popular Chinese eCommerce site Pinduoduo, made its debut in the U.S. market in September with great fanfare. In a short period, it skyrocketed to the top of Apple Inc.’s U.S. App Store, garnering widespread attention.
Temu’s marketplace offers a wide range of clothing and home decor items at low prices. It positions itself as a potential competitor to retail giants like Amazon and Ebay.
However, Tel Aviv-based Ultra Information Solutions conducted research and uncovered a disconcerting truth. It turned out that at least ten products available on Temu identified as originating from businesses based in Xinjiang.
These products obscured company links and origins, effectively bypassing the restrictions imposed by the U.S. ban.
Co-founder of Ultra, Ram Ben Tzion, expressed deep concern over this discovery, labeling it a systematic violation of U.S. trade policies. Despite attempts to reach out for comment, representatives from Temu and PDD have not responded to multiple requests.
This revelation reminds us of the urgent need for stricter monitoring and regulation in global supply chains. Online platforms must be responsible and ensure the ethical sourcing and transparency of their products.
This is a stark reminder that consumer choices can have far-reaching implications. The quest for competitive prices should not come at the expense of human rights and fair labor practices.
What should eCommerce sellers note?
eCommerce sellers should care about the issue of products from Xinjiang selling on platforms like Temu. It directly impacts their reputation, business ethics, and customer trust.
Consumers are becoming increasingly conscious of ethical sourcing and labor practices. They expect transparency and want to support businesses that align with their values. eCommerce sellers should address these concerns. They need to ensure that their supply chains are free from unethical practices. Doing so will build and maintain trust with their customers, fostering long-term loyalty.
Amazon Excluding Temu From Price Searching Algorithm
In a move that sparked controversy, Amazon decided to exclude its Chinese rival, Temu, from its price-searching algorithm. The reason cited by Amazon is that Temu needs to meet the qualification requirements for Amazon’s fair pricing policy.
The algorithm plays a crucial role in determining whether products listed on Amazon’s platform are competitive compared to other retailers’ offerings.This ensures that prices on Amazon remain in line with market standards. It prevents sellers on the platform from charging significantly higher prices than their rivals.
The pricing algorithm employs a combination of automated and manual tracking methods. They compare prices both on and off the platform.
What does Temu have to say about this?
Temu has stated on its website that it has a firm policy against listing or selling products that infringe on third parties’ trademark, copyright, or patent rights.
Furthermore, Temu positions itself as a platform not directly involved in the listing and selling of items. According to their statement, vendors are responsible for obtaining the licences for their respective stores.
The exclusion of Temu from Amazon’s price searching algorithm has sparked a debate around fair competition and pricing policies. The differing perspectives highlight the complexities of navigating the online marketplace landscape.
As the eCommerce industry continues to evolve, it remains important for platforms and sellers to find a balance that ensures:
- fair competition,
- protects consumer interests,
- and upholds intellectual property rights.
Don’t miss out on our latest Amazon Statistics article.
Also in the News
- Expect ebay Listing Page tweaks. Find out more at eCommerce Bytes
- Motorola gets listed on Amazon before their official launch. Business Today.
International Retailer News
AliExpress Enhances Services for the Summer Sales Season
AliExpress, a China-based ecommerce giant, has recently introduced a range of enhancements aimed at elevating the shopping experience for its customers. These updates include the introduction of free returns and a three-day delivery service.
In February 2023, AliExpress rolled out a program called AliExpress Choice. This program provides benefits to consumers across numerous markets. One notable feature is the provision of free return services for select products.
AliExpress has now taken a significant step forward by expanding the free return service for consumers in Spain. This marks the first time such an expansion became implemented in any market.
A faster delivery time, discounts, and even free shipping is waiting for many AliExpress customers this summer. So, if you’re an eCommerce seller, make sure to check out our article on How to Start a Dropshipping Business in 2023.
The GCash Mobile Wallet is Now Recognized and Usable in Europe
The GCash mobile wallet has now expanded its reach and encompasses some of Europe’s most popular travel destinations. They include the United Kingdom, France, Germany, and Italy.
This development is part of GCash’s enhanced collaboration and partnership with Alipay+. By joining forces, they aim to provide travelers with a smooth and secure payment experience.
Not only that, but GCash also offers real-time foreign exchange (forex) services without any service fees. This means that customers can enjoy a hassle-free and rewarding travel experience abroad. GCash ensures their transactions are convenient and cost-effective.
With GCash’s acceptance in Europe’s top travel destinations, globetrotters can now rely on this mobile wallet. Whether it’s for shopping or exploring local attractions, the experience is more straightforward. This expansion reflects GCash’s commitment to offering its users a seamless payment ecosystem. It allows them to make the most of their travels without the inconvenience of carrying physical cash. They also won’t have to deal with complicated currency exchanges.
All in all, wherever you’re traveling, you can rely on GCash in all situations. Enhance your travel experience with the new mobile wallet today.
Also in the News
- Northern Ireland export market in good light. Retail Times.
- Shopify appoints new EMEA leaders. Fashion United.
Webinars
For everyone
Various dates: Amazon advertising’s global webinar program continues with 20+ webinars scheduled, covering Prime Day Preparation, Sponsored Products, Sponsored Brands, reporting, optimization, and other tips.
For US sellers
July 6: The 15 Minute Tinuiti Breakdown.
For UK sellers
Various dates: Amazon advertising’s global webinar program continues with 20+ webinars scheduled, covering Prime Day Preparation, Sponsored Products, Sponsored Brands, reporting, optimization, and other tips.
The costs for selling on Amazon has escalated. Advertising costs reach 55% which does not include the 15% fee for the sale. Advertising costs changed two years ago. They recommend you increase your advertising costs in return for more sales which is not the case. Selling on Amazon has become very expensive. They keep changing the policies which benefits them such as the buy shipping. There are also more scammers on Amazon.