Amazon closes third-party store in China over fake cosmetic report

SHANGHAI Fri Mar 21, 2014 9:14am IST

A parcel moves on the conveyor belt at Amazon's logistics centre in Graben near Augsburg December 16, 2013. REUTERS/Michaela Rehle/Files

A parcel moves on the conveyor belt at Amazon's logistics centre in Graben near Augsburg December 16, 2013.

Credit: Reuters/Michaela Rehle/Files

Related Topics

Stocks

   

SHANGHAI (Reuters) - U.S e-commerce giant Amazon.com Inc's(AMZN.O) China unit will strengthen regulation of its online sales channels and has closed down a third-party store, the online retailer said on Thursday, after state media criticised Amazon and smaller local rival Dangdang for selling fake cosmetics.

A report on China Central Television (CCTV) said that third-party sellers on Amazon and Dangdang were re-selling fake cosmetic products, some of which were sourced from local grey-market wholesalers.

Consumer protection has moved up on the agenda in China after the country strengthened consumer rights laws last year, dragging local and international firms into the spotlight including Apple Inc (AAPL.O), Nikon Corp (7731.T) and Wal-Mart Stores Inc (WMT.N).

Amazon's China unit said in a statement on its official microblog account that it was taking the 30-minute CCTV report "extremely seriously" and took a "zero tolerance policy" towards fake goods. It added it had agreed to refund shoppers who had bought the relevant products.

"We will strengthen the process of scrutiny and regulation of our sellers," Amazon said on China's Twitter-like Sina Weibo, adding that any merchants who sold fake products would be immediately closed.

Fake goods sold online abound in China, which has caused a headache for e-commerce firms trying to regulate their platforms. Market leader Alibaba, with more than 45 percent of the market, has previously cracked down on fake sellers.

Dangdang said on Weibo it had investigated the issue and would continue to work hard to regulate sellers on its platform. However, it also called for brands to give online sellers more sales rights to prevent them going through grey-market channels.

Amazon and Dangdang both hold small shares of China's fragmented Internet retailing market. Amazon had 1.6 percent of the market in 2013, while Dangdang had 1.1 percent, according to data from Euromonitor.

(Reporting by Adam Jourdan; Editing by Matt Driskill)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

TECH SHOWCASE

Rising Market Value

Rising Market Value

Facebook goes express to mega-cap status  Full Article 

Right to be Forgotten

Right to be Forgotten

Google under fire from regulators over response to EU privacy ruling.  Full Article 

Record Smartphone Sales

Record Sales

LG Electronics flags further mobile improvement after Q2 profit jump.  Full Article 

Smartwatch

Smartwatch

Swatch Group denies working with Apple on smartwatch.  Full Article 

Strong Results

Strong Results

Nokia's fortunes brighten on heavy network spending.  Full Article 

Battle of Giants

Battle of Giants

In China, Apple's focus pays off while Samsung feels squeeze.  Full Article 

Anonymity Services

Anonymity Services

Flaws could expose users of privacy-protecting software, researchers say.  Full Article 

Biggest Chipmaker

Biggest Chipmaker

China regulator determines Qualcomm has monopoly - state-run newspaper.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage