Trends come and go in eCommerce. Influencer marketing. Bitcoin transactions. But if there's one troublesome yet enduring trend that remains constant on Amazon, it's review manipulation.
With an estimated 75 percent of new sellers in the top four Amazon markets in 2021 being based in China, it's fair to say that the country has a relatively disproportionate representation on the platform. And the vast majority of Chinese sellers do provide legitimate, high quality products which remain popular with both US and overseas purchasers.
Unfortunately, the nation has also become synonymous with questionable sales tactics—not the least of which includes review manipulation.
China's Role in the Global eCommerce Market
Amazon may retain enough sales globally to keep it at the top of the eCommerce market in all but one nation—China. And it's a region that both third party sellers and retail platforms can find it difficult to make headway in.
While the Chinese eCommerce marketplace has historically been dominated by the likes of Alibaba and JD.com, Amazon has historically made little headway in the nation. In fact, they announced the closure of its presence in 2019 to focus on cross-border sales support to Chinese consumers.
But the demand for cheap manufacturing and exports has become even more critical to the global online sales boom over the past two years. Over 50 percent of China's retail sales business was digital in 2021, with projections of 55.6 percent by the end of 2022.
The only number more impressive is China's manufacturing strength, which now sits at a staggering $4.84 Trillion in sales, allowing the nation to retain its long standing reputation as the largest manufacturer in the world.
So why did it take a Federal Trade Commission inquiry in May of 2021 for Amazon to remove Chinese sellers found indulging in fake review schemes some two years after the FTC brought its first case against paid reviews?
Fake Reviews, Amazon and the FTC
The 2019 complaint filed by the FTC was the result of a two year investigation into the practices of one seller: Cure Encapsulations, Inc. At the center of the $12.8 Million suit were allegations that Cure Encapsulations had paid a site, amazonverifiedreviews.com, to specifically create and post a number of five star reviews in order to boost sales on Amazon in direct violation of prohibited seller practices.
But while the case was the first specifically filed by the FTC, Amazon themselves have filed similar suits in federal courts as early as 2015, noting that paid reviews “threaten to undermine the trust that customers, and the vast majority of sellers and manufacturers, place in Amazon, thereby tarnishing Amazon's brand.”
Both suits were not the last of their kind. Even to this day, numerous complaints are lodged both by and against Amazon alleging widespread review manipulation and fraud. Typically these reviews are relatively easy to spot, indicated by both unverified purchase status and information almost comically irrelevant to the product itself.
But scammers are getting craftier. Last summer, thousands of Americans received unsolicited packages of seeds postmarked overseas as part of a brushing scheme, in which merchandise is sent to publicly available addresses in order to post 5 star reviews under the recipients name, earning verified purchase status in the process.
Not surprisingly, the origin of those packages was postmarked from China.
China and the Fake Review Economy
The Chinese eCommerce market may have accounted for an impressive $11.7 billion yuan in 2020 (approximately $1.8 Trillion USD.) But its regulatory policies are notoriously lax, leading to a burgeoning economy of both counterfeit goods, deceptive sales tactics and false advertising—not the least of which includes increasingly sophisticated forms of review manipulation.
Yet Amazon has always welcomed Chinese sellers, even going so far to host yearly global selling summits across numerous cities in mainland China. The result of these summits has led to an influx of highly informed and diverse third-party sellers from all over the region, sparking a boost in cross border commerce; a fundamental necessity in the increasing competition between Amazon and China's own Alibaba.
In 2018, news emerged that Amazon was reportedly investigating complaints of leaked information about sales metrics and competitive reviews to sellers originating from bribed foreign nationals in China, including a service to delete negative reviews, delist related products and restore bad seller accounts. Even more recently, a data breach in May 2021 revealed an additional fake review scam exposing a potential 13 million records also believed to have originated in China.
As a result, Amazon recently issued a statement reemphasizing their commitment to halting fake reviews, noting that over 200 million false reviews were prevented from being published thanks to their detection in 2020 alone.
Sadly, that may not be enough to root out review manipulation entirely in China, where third party providers and social media networks have fostered an underground economy of fake reviews. They may pay very little. But they provide one of the cheapest and most effective ways to achieve visibility in the digital jungle
Fair Advertising and Social Proof: The Heartbeat of eCommerce
A positive review can't be bought.
There's a reason why review manipulation is against Amazon's terms of service. Social proof is one of the most significant drivers of Amazon's success; and social proof demands authentic feedback to validate the customer-centricity that Amazon was built upon.
That's why sellers can't automatically remove reviews. It's not just misleading. And it's not just against Amazon guidelines. It violates what customers demand from a social proof-driven environment like Amazon: the good, the bad and the ugly.
Both in the US and overseas, it's not just common for Amazon to immediately suspend sellers found to engage in review manipulation. It's an everyday occurrence. While that hasn't stopped a recent probe from a UK based regulatory agency threatening legal action against the platform on charges of overlooking schemes incentivizing fake reviews, for the most part Amazon has abided by fair advertising laws.
Yet China has historically been lax on both fair advertising as well as intellectual property, as recent regulatory decisions from the nation's official oversight board have shown. Search results on Facebook can reveal dozens of groups devoted to review manipulation schemes offering an easy way for affiliates to earn free goods and spare cash, with many users originating in both China and the Asia Pacific region.
Fair advertising laws developed in an entirely different context from the world of eCommerce. When the FTC was established in 1914, no one could have imagined a retail platform like Amazon to exist, much less the emergence of social proof as a predominant advertising force.
Advertising may adapt to technology. But technology has adapted to advertising, as well. And the line between both isn't always as clear as it should be when it comes to authenticity.
Does Amazon Have An Uphill Battle?
Amazon reportedly spent the first three months of 2021 notifying social media networks of over 1,000 fake review groups, resulting in their elimination within 5 days. In addition to May 2021's widely reported banning of 14 separate Chinese businesses found to manipulate reviews, it was reported in June that Amazon had delisted three popular native brands from their marketplace—VAVA, Taotronics and RAVPower, resulting in an estimated loss of revenue of approximately 31 percent.
While Amazon's role as “Earth's Most Customer-centric Company” continues to develop in new and innovative ways, both customers and sellers share a mutually inclusive relationship.
And both interests should be aligned. As seller brand gating continues to grow stronger, it's up to both parties to be proactive in ensuring objective reviews. Because like it or not, it's not just Amazon's reputation being tarnished by review manipulation and fake reviews.
It's the integrity of digital commerce itself.
Not knowing who is reviewing your business can hurt you more than your competitors can. Find out more at Color More Lines.