Amazon used sales data to replicate popular products and promote its own brands in India, according to Reuters
Its name is Project Solimo. The objective: identify and target “reference” products and then “replicate” them. The strategy: “use information from Amazon.in to develop products and take advantage of the platform to distribute those products to our customers.”
This is what documents now revealed in a Reuters investigation that shows how the company used this technique in India: leveraged sales data from sellers using the platform, and replicated its most popular products to then compete directly with those sellers.
The recipe to crush the competition: clone, position, sell cheaper
The Reuters investigation reveals how Amazon collected private data on sales, then contacted the same manufacturers that produced those products to replicate them. The objective: end up promoting their own brands through searches in their online store.
This research is one more drop in that glass that is filling up more and more with these kinds of accusations. In 2018, the European Union launched an investigation into Amazon for this issue, and ended up accusing it two years later in a legal process that is still under development.
In the United States, there has also been a long talk of practices that suffocate sellers who use Amazon to distribute their products: if they are very popular they run the risk of being cloned to be sold under Amazon’s own brand, and now the documents mentioned by Reuters confirm these techniques in India.
According to these reports, the products of the Solimo project were sold between 10% and 15% cheaper than those of its competitors, and even the same manufacturers were used. They take as an example the shirts of John Miller, a well-known brand in India: after copying those products, they had the plan to show John Miller’s results in second or third position, favoring the shirts made by Amazon.
In 2020 it was the United States House of Representatives Committee on the Judiciary that made those accusations, but Amazon denied those allegations.. Jeff Bezos himself indicated in July of that year that “we have a policy against the use of vendor-specific data that helps our private label businesses,” he said.
Those statements were in contrast to the investigation carried out by Yahoo! Finance in 2019 that showed how the team that develops its own products at Amazon had a “free buffet” in terms of access to third-party data.
Interestingly, in 2018 Bezos published a letter to investors in which he admitted that “outside sellers are giving our own products a big kick in the ass“At that time, third-party product sales had come to represent 58% of Amazon’s total sales.
Amazon insists: they prohibit using seller data for their benefit or that of any other seller
In Engadget we have contacted Amazon, and a company spokesperson tells us that “As Reuters has not shared the documents or their origin with us, We cannot confirm the veracity or not of the information as it appears in the article. We believe that these statements are not factual and unsubstantiated. “
The company further adds that “Amazon does not grant preferential treatment to any seller in its store” and that “Amazon’s policy strictly prohibits the use or sharing of vendor-specific non-public data for the benefit of any other vendor, including private label vendors. “
More information | Reuters