Amazon copied products of rival manufacturers and used its internal data to boost product lines and gain an edge over other sellers in India, new documents accessed by Reuters have revealed.

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The report that examined emails, strategy papers and business plans shows that Amazon tried to dominate the platform by creating knockoffs and rigging search results to stoke sales of its own brand, Solimo, in India, one of the company’s largest growth markets.

What did the documents reveal?

The documents show that Amazon employees studied detailed information of other brands on their platform so as to identify and target goods and copy them. Amazon’s brand Solimo, created for the Indian market, laid out a strategy in 2016 to “use information from Amazon.in to develop products and then leverage the Amazon.in platform to market these products to our customers.”

Amazon employees also planned to partner with other manufacturers they were targeting to learn the “unique processes which impact the end quality of the product,” the 2016 document, titled ‘India Private Brands Program,’ revealed.

“It is difficult to develop this expertise across products and hence, to ensure that we are able to fully match quality with our reference product, we decided to only partner with the manufacturers of our reference product,” the document said.

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Earlier, there had been reports of Amazon exploiting propriety data to launch its own competitive products and manipulating search results to boost sales. However, that it was part of a clandestine strategy, especially for one of its largest markets India, was revealed for the time through the documents accessed by Reuters.

The documents also reveal that senior vice-presidents Diego Piacentini and Russell Grandinetti were aware of the strategy. While Piacentini has left the company, Grandinetti heads Amazon’s international consumer business.

Solimo impact

The Solimo project in India has had an impact internationally. Its health and household products are offered on the US website, Amazon.com, for sale.

Amazon created the Solimo brand using the Indian website to get a clear edge over other products. The word Solimo is taken from Solimões, which is a name for the upper stretches of the Amazon river in Brazil.

With the Solimo brand, Amazon planned to offer items similar to competing brands but at 10-15 percent cheaper, according to the 2016 Private Brands document.

Amazon employees targeted home furnishings which had a $2-billion business in India, of which its own website sold around $1 million in three months during mid-2014.

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Amazon used a strategy called “glance views” to quantify the products that were being viewed by customers on its website.

Once the brands were identified, they were replicated to ensure customer requirements in terms of performance were met.

Amazon asked its employees to model goods of other companies for their own samples.

Among those brands benchmarked by Amazon employees were Old Navy/GAP men’s shirts, Prestige for pots and pans, Peter England and Louis Philippe for men’s shirts, and John Players for menswear.

Amazon’s response

In a written reply, Amazon said it found the claims in the Reuters report factually incorrect and unsubstantiated. “As Reuters hasn’t shared the documents or their provenance with us, we are unable to confirm the veracity or otherwise of the information and claims as stated,” Amazon said.

The retail giant also said it displayed search results based on relevance to the customer’s query and not favouring any private brand.

Piacentini and Grandinetti were not available for comments.

Amazon under scrutiny in India

Amazon and Flipkart have been under the radar of the Competition Commission of India (CCI) for extending preferential treatment to certain sellers on their e-commerce platforms. The unfair practices watchdog has been probing the two retail giants Amazon and Flipkart for favouring some sellers to the disadvantage of others. The allegations brought in by a traders’ body also claimed that some of these preferred sellers were entities with direct or indirect links with Amazon and Flipkart.

Amazon has also been under investigation in the US and Europe for its alleged anti-competitive practices. The new revelations by Reuters on Amazon’s practices in India may have an impact on the probe by the European Commission.

“When any one competition authority is looking into aspects of one of these globally present organisations’ behaviour, they will certainly be interested in understanding what evidence there is in other parts of the world and the extent to which that evidence relates to the practices that they themselves are investigating,” Jonas Koponen, an antitrust attorney with Linklaters LLP in Brussels, told Reuters.

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(Edited by : Shoma Bhattacharjee)

First Published:Oct 14, 2021 5:37 PM IST