As Amazon’s own brands have quietly grown, the company founded by Jeff Bezos has repeatedly been accused of copying successful products from outside sellers and using its platform to push them through altered search results.
While the company has denied the allegations time and again, a series of internal documents examined by Reuters reveal an uncomfortable reality for the e-commerce giant. Systematic, anti-competitive and meticulously planned practices to make its Indian business more lucrative.
The 2016 documents, which include emails and business strategies, indicate that Amazon leveraged data from its platform, which is protected by trade secrecy, to launch its own products and have them appear among the top two or three results.
The Internet giant not only took into account the volume of sales when copying a product, but also the features “in detail” to snatch success from the original seller. One of the victims of this strategy was Indian retailer John Miller, known as the country’s “retail king”.
Amazon began selling shirts like John Miller’s under one of its own brands. But instead of introducing any changes, the company decided to copy everything. From the circumference of the collar to the length of the sleeve, according to documents seen by Reuters.
Mind you, as mentioned at the beginning, the e-commerce giant wasted no time with products whose performance was below expectations. To that end, it didn’t let anything slip through its fingers. Its employees studied everything related to the brand, from the product to its sales and returns.
The ambition to go down this rocky road led Amazon to take even more controversial actions. It realized that some products were very difficult to copy. This was due to “unique processes” that affected their final quality. Only in those cases did it think of partnering with manufacturers to match them.
“It is difficult to develop this expertise across all products and therefore, to ensure that we can fully match the quality with our reference product, we decided to partner only with the manufacturers of our reference product,” Amazon’s internal document quoted.
It should be noted that both Jeff Bezos, in an opportunity before the U.S. Congress in 2020, and other Amazon executives have denied this type of practices. In that sense, they have explained that employees are prohibited from using their sellers’ data to help grow their business.
The truth is that, according to internal documents, Amazon’s anti-competitive strategy in India was known to at least two senior executives. Among them were the former head of International Business, Diego Piacentini, and the current head of that division, Russell Grandinetti.
At the global business level Amazon has more than 80 own brands that it sells through its platform. These are not available in all countries and many are very local, as in the case of India. Precisely, they are very focused on a particular market to achieve the greatest possible success.
Finally, the documents reveal that the introduction of Amazon’s own brands was critical to maintain the business in India. It recorded losses in the millions shortly after starting operations in 2013. However, its own brands enabled it to build a “long-term sustainable” business.