Amazon.com, Inc. (NASDAQ:AMZN)’s Chinese unit will foray in the region of its own, and on the same lines have closed down a third-party store. U.S. e-commerce giant, on Thursday, announced the decision following the accusation from the media for selling fake cosmetics.
China Central Television (CCTV) reported that the third-party sellers on Amazon and smaller local rival Dangdang were re-selling fake cosmetic products. Some of these cosmetics were acquired from the local grey-market wholesalers.
Zero tolerance policy
In a statement, on the official Twitter-like Sina Weibo account, Amazon China said that it is taking the CCTV report “extremely seriously,” and would follow a “zero tolerance policy” towards fake goods. The online retailer also, told that it would refund the money to the customers, who have purchased any such products.
“We will strengthen the process of scrutiny and regulation of our sellers,” Amazon.com, Inc. (NASDAQ:AMZN) said, and added that the merchants selling fake products will be closed immediately.
On Weibo, local firm Dangdang said that it is investigating the issue, and would make every effort to regulate the platform. The company, also, asked the brands to give online sellers more sales rights, so that they don’t have to rely on grey-market channels.
According to data from Euromonitor, Amazon.com, Inc. (NASDAQ:AMZN) and Dangdang are small players in the scattered Chinese internet retailing market with 1.6% and 1.1% share, respectively.
Cases rising in China
Many cases of fake goods selling have been come forward in China making it tough for e-commerce firms to normalize their operations, in the region. Alibaba, the market leader with 45% share, have also been involved in similar cases before, and came out with tougher laws.
China has been strengthening its consumer protection laws, since last year, and has been targeting local and international firms including Apple Inc. (NASDAQ:AAPL), Nikon Corp and Wal-Mart Stores Inc.
Earlier this year, a ministry official revealed that the authorities have seized fake products worth more than 9,000 tons worth 172.9 billion yuan, and have arrested 59,000 people. In a February report, a U.S. Trade Representative citing an example of Beijing’s Silk Market, said that China is the main link to a number of markets known for “prominent and extensive availability of counterfeit merchandise.”