Chinese Merchants Banned On Amazon Are Popping Up On Walmart's E-Commerce Site: Report

Chinese merchants who were banned from Amazon.com, Inc. AMZN for generating fake customer reviews have relocated their shenanigans to Walmart Inc.'s WMT e-commerce site, according to a new report from Bloomberg.

What Happened: Last year, Amazon terminated more than 50,000 China-based retail accounts for violating its terms of service, according to data compiled by the Shenzhen Cross-Border E-Commerce Association.

While Amazon spent much of 2021 expelling unscrupulous Chinese merchants, Walmart spent the year trying to bring new international sellers to its e-commerce site. The research firm Marketplace Pulse estimated that Walmart added approximately 8,000 China-based merchants to its site since last March, and this number accounts for 14% of its new merchants and nearly all of its sellers from outside of the U.S.

Juozas Kaziukenas, CEO at Marketplace Plus, warned that Walmart Fulfillment Services (WFS) was not properly informing consumers that they were dealing with Chinese merchants.

“WFS makes the seller’s business location practically invisible to shoppers since Walmart ships orders from domestic warehouses on the seller’s behalf,” said Kaziukenas in a report published last month.

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Why It Matters: Amazon controls 41% of the U.S. e-commerce market, according to data published by Statista, while Walmart only accounts for 6.6% if this sector.

Bloomberg observed that Chinese social media sites offer local merchants advice on so-called “brushing services” to generate bogus shopper data that gives the false impression of high sales volume and overwhelmingly positive consumer reviews.

A Walmart spokesperson insisted the retailer does not tolerate chicanery by its online merchants.

“If reviews are found to be fake, they are removed from the site. The offending party is reviewed for corrective action or removal,” the company said in a statement. “We work to identify fake reviews but no process is perfect,” it said.

Photo: Mediamodifier / Pixabay