“Made in China” is a phrase with which all U.S. consumers are intimately familiar.
Half of Amazon Sellers Based in China
On Amazon, 50 percent of all global sellers are based in China, according to data from Marketplace Pulse, a website that provides e-commerce market data. Those sellers store their goods and products in the United States at Amazon’s warehouses, so the items are shipped domestically and qualify for fast “Prime” shipping—also dubbed as the “Fulfillment by Amazon” program.Chinese sellers make up the highest percentage of all sellers on Amazon.es, the company’s Spanish retail website, at 64 percent. More than 50 percent of Amazon’s French, Canadian, and Italian sites are Chinese sellers, highlighting a dearth of domestic e-commerce companies within those countries. Amazon’s U.S. website is made up of 44 percent Chinese sellers, meaning the majority of sellers on the U.S. website are based in the United States—for now.
While these raw numbers could be skewed because some sellers maintain multiple selling accounts, the directional trend is clear: Amazon is the largest and most efficient direct-to-consumer vehicle for Chinese brands to target U.S. and European consumers. And China is the world’s biggest factory and arguably has the highest e-commerce adoption. On paper, it shouldn’t be shocking that many products on Amazon are from China.
E-Commerce Expansion a Key Initiative for Beijing
This trend has been years in the making.In China, the “Made in China, sold on Amazon” motto is a critical business model for Chinese e-commerce merchants. Merchants selling products on Amazon have formed a hub in the southern city of Shenzhen, Guangdong Province, a region dubbed as China’s “Silicon Valley.” Many well-known brands on Amazon are headquartered there, including Aukey, Mpow, RAVPower, and Taotronics, which all make popular tech accessories sold on Amazon.
This strategy has the blessing of the Chinese Communist Party (CCP) at the highest levels.
On July 1, China’s customs began implementing a new, faster clearance system for outbound business-to-business e-commerce in an effort “to promote healthy and orderly development of cross-border e-commerce and to help the expansion of Chinese companies in international markets,” according to a South China Morning Post report.
This effort has cabinet-level support. Premier Li Keqiang said at a late June meeting of the State Council that cross-border e-commerce is a key strategic initiative for Beijing and signaled for Chinese merchants to build up their inventories abroad and increase logistical capabilities.
While the biggest merchants had an advantage before, the new rules should allow smaller Chinese merchants to clear customs faster.
There’s a Chinese cottage industry to support this as well. A website called Yuguo Platform provides training courses for Chinese sellers to establish themselves on Amazon, AliExpress, TikTok, eBay, and a number of foreign e-commerce websites.
A Tumultuous Relationship
Amazon has also actively courted Chinese sellers.The Seattle-based giant doesn’t disclose the number of gross sales made by third parties (non-Amazon sales) or the number of sales made by Chinese third-party sellers, so the magnitude of China-originated sales is unknown. A representative from Amazon declined to provide China-based sales numbers in an emailed statement.
Founder and Chairman Jeff Bezos’s mantra is putting customers first, which includes offering products at the lowest prices—often sourced from China.
Amazon has also battled integrity issues with its Chinese sellers. Several China-based storefronts on Amazon were temporarily suspended in May 2021, including those of popular sellers Mpower and Aukey.
While Amazon didn’t disclose the reasons for the suspensions, the enforcement actions were related to fake product reviews, according to a letter Amazon sent to its third-party seller base.
Amid the competitive environment, some vendors have resorted to paying customers for product reviews. This author has received e-mails from certain China-based vendors to post reviews on Amazon in exchange for an Amazon gift card, which is a violation of Amazon’s seller agreement.
“I admit that I pay for some reviews, but that’s because my competitors are doing the same. I have to do it, too,” a seller wrote in a discussion forum of an online merchant community about Amazon’s fake review crackdown, according to a South China Morning Post report.
“If there’s a healthy environment for competition, who would want all these deceptions?”