In India, Amazon would have created copies of products from other brands and then they would have tapped the search results so that these copies would appear in the first places. This is revealed by an extensive report by Reuters, based on internal company documents that detail the company’s strategy to position itself in the Asian country.
According to the investigation, Amazon’s entry into India initially did not have the expected results and resulted in millions of dollars in losses. Therefore, Jeff Bezos’ company came up with a plan to create their own brands and clone popular products.
One of these brands is called Solimo and some of its products are already sold on Amazon in the United States. Solimo’s strategy as a brand was “to use information from Amazon.in to develop products and then build them within the same platform to promote them to our users.”
Among the copied products are furniture and clothing; Precisely in terms of clothing, Amazon employees would have analyzed returns data to find out the reasons for the dissatisfaction of customers.
An example of this was that of some Xessentia brand t-shirts from Amazon, whose design and measurements were based on the Louis Phillipe brand, very popular in India. But after hundreds of returns, Amazon concluded that it was best to change the measurements and rely on those of another popular brand: “We have decided to follow the measurements of the John Miller t-shirts, because they are more popular with our customers.”
The documents reveal that Amazon India identified certain products as references and based on them created new versions for its brands. However, after a while, the company realized that some products could not be replicated because the original brands had quality standards and manufacturing processes that were impossible to match. Therefore, they decided to partner with some of them to offer some of these products together.
Even taking the above into account, one of the most questionable practices of this Amazon India strategy would have been to manipulate search data and display its own products above those of the rest.
A vendor in India explained that his sales of mouse pads fell suddenly and, investigating the causes, discovered that this fall coincided with a new mouse pad Amazon’s own that, in addition to being cheaper, always appeared first on the results page.
Although Amazon denied all the revelations of the report – and not for nothing it sued sellers of pirated products recently – it is believed that this investigation may be of interest to regulators in India as well as in the United States and Europe, both for issues of anti-competitive practices as well as the use of private user data.