Amazon’s Crackdown on Fake Reviews by Chinese Sellers Is Working as the Chinese Government Is Bailing Out Bad Merchants
It’s happened to many of us that shop on Amazon. We see a fantastic deal on a product and look at the reviews before ordering it, but we find out that it is coming from a seller in China.
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Now we pause, is it worth the 4 to 6 week wait? But other items on Amazon that seem similar are vastly more expensive and we really don’t need it tomorrow.
We take another look at the reviews. They look legitimate, buyers even posted pictures and many reviews are marked as “Verified Purchase.” Ok, let’s buy it.
After about a month, the order arrives. The product is total junk when we take it out of the box. We are pissed!
In short, we became a victim of what is known as review fraud, a widespread practice in China where sellers pay buyers to post good reviews and drive-up positive sentiment about a product on Amazon. Another tactic is to bribe buyers who left a bad review and have them delete or change their review.
Either way, a potential buyer gets the wrong impression about a product before buying thinking the item is good, when in fact, it is a poorly designed or badly manufactured item.
On Amazon, this problem has been prevalent for years and the company knows it. They even have a policy against fake reviews called the Anti-Manipulation Policy for Customer Reviews. There’s been talk about government action, but that is fraught with challenges.
In June, the company said it removed 200 million fake reviews last year. That is a staggering number!
Fake Reviews Crackdown Effects Many Chinese-Based Sellers on Amazon
Even though the practice of soliciting fake reviews is not confined to Chinese-based sellers, it is more prevalent among them, and they are feeling the effects of Amazon’s crackdown even to a point where some of them may have to close their doors.
The South China Morning Post (SCMP) reported that last month the Commerce Bureau of Shenzhen said it would offer cross-border eCommerce merchants a subsidy of two million yuan (about $308,000) to help with the loss of business because of Amazon’s crackdown on fake reviews.
The subsidy is designed to help those merchants build an independent website from which to sell their products, not rebuild stores on large marketplaces like Amazon. Or so they say.
In addition to the subsidy, the bureau held another meeting last week with local merchants to “study and formulate relevant solutions” to “help lift cross-border eCommerce companies out of the difficulties,” SCMP said.
Shenzhen is home to about 40,000 companies involved in cross-border eCommerce, accounting for roughly 35% of the entire industry in China. That’s a lot of companies flooding marketplaces globally with a sizable portion offering inferior and cheaply made products that need the help of fake reviews to be successful.
Because of Amazon’s crackdown on the industry, the Chinese government felt it had to protect its export model for small businesses “Made in China, sold on Amazon” and the subsidy appears to be a corner piece to that plan.
The real problem is that China is not cracking down on fake reviews but is helping those companies potentially use the same “marketing strategy” to offer products on their own websites. In other words, these bad sellers can continue to exploit consumers without a marketplace looking over their shoulder.
The government even said it will offer up to 3 million yuan ($412,000) for companies it evaluates as being “best-in-class cross-border service providers.” The threshold level to meet this requirement can’t be much because why would a “best-of-class” company need a government bailout because they got busted by Amazon for violating its review integrity policy?
The worst part of this scheme is that with the government money, Chinese merchants can fund the development of professional websites, market them on Google (and other search engines), and make their products look fantastic through positive reviews that don’t even need a “Verified Purchase” from a buyer the seller had to bribe.
In addition, through the power of CPC advertising potentially funded by government money, they can drive traffic to their “professional” looking sites by outbidding legitimate small businesses that offer quality products and excellent service.
If this scheme works by the Chinese government, buyers will have to do more research on websites before purchasing to ensure they are buying from a reputable company that offers good products with a full warranty and service.
Supplying the world with bad products appears to be a better business model for China than trying to raise the quality standards of its companies so they don’t have to rely on fake reviews. That’s sad!
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.