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The Solimo Strategy: How Amazon Destroys Merchants Using the Platform

Amazon.com Inc has repeatedly been accused of copying the products of other merchants who use the platform, and of using the collected sales data to give an unfair advantage to its own goods at the expense of other sellers. The company denies.

But thousands of pages of documents leaked by Amazon and researched by Reuters – including emails, strategies and business plans – show that the company is campaigning systematically to create copies and manipulate consumer search results to boost sales of its own products in Reuters. India, one of the fastest growing markets.

The documents reveal how a team of a company in India copied the products sold by other companies and then sold them on the platform. Employees have increased

and selling your own brands by manipulating the results. A 2016 document said they should be “in second or third place”.

Among the victims is John Miller, a popular shirt brand in India. Amazon is copying the measurements of the shirts down to the smallest detail, the documents show.

The products are selected through careful sales analysis. Purpose: to identify goods to be copied. The strategy, first developed for the Indian market, is called Solimo. Although it originates in India, the products developed as part of it are now available in other markets, including the United States.

Amazon employees not only copy the products, but also find their manufacturers and sign contracts with them after learning that some of them have “unique processes that affect the quality of the product.”

Amazon has previously been accused by employees of taking advantage of the success of retailers to destroy them – by copying their products and manipulating the results. In 2020, before the US Congress, founder Jeff Bezos swore that this was not true.

But the leaked documents prove that this is not just happening and it is not a question of individual cases, but of a purposeful strategy, with which the top managers were also acquainted.

In response to Reuters, Amazon denied again, but without answering specific questions from journalists.

The company has already been investigated in the United States, Europe and India for practices that harm competition.

Like many other companies, Amazon considers its own brands to be a significant driver of profit. Products in this category often have a higher margin because production and marketing costs are lower.

An internal communication from 2018, sent by Russell Grantinetti, currently director of international consumer business at Amazon, reads: “We believe that Own Brands will be one of the most important drivers of growth and profit in the Consumer Business over the next few years.” .

Representing them in India is especially important for the company. It entered this market in 2013 and soon reported millions of dollars in losses. A 2016 document shows that Amazon is targeting its own brands as a way out of the situation. The goal: to make such products available in 20 to 40 percent of all product categories available on Amazon.in. The company predicts that their sales will reach $ 600 million in 2020 in India. It is not clear whether the goal has been achieved.

In India, meanwhile, a controversial debate has erupted in recent months over the activities of foreign e-commerce operators operating in the country. In June, the government proposed draft legislation that would further restrict the activities of Amazon and others, following complaints from consumers and retailers about unfair business practices.

The proposed rules could completely ban Amazon from selling branded products in India.

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