45% of the top sellers are located in China, and the number of Chinese-made products on Amazon has soared

The number of Chinese sellers on Amazon has been increasing over the years, and this trend will continue. The large number of Chinese sellers and strong Chinese manufacturing have had an impact on the Amazon ecosystem .

Chinese sellers account for 75% of new Amazon sellers

According to a report from Marketplace Pulse, in January, Chinese sellers accounted for 75% of new sellers on Amazon. This is a significant increase from 47% in the previous year.

Three-quarters of new sellers in Amazon’s four core markets (the United States, the United Kingdom, Germany, and Japan) are located in China. This percentage is a calculated average across the four markets, based on Marketplace Pulse’s analysis of more than 40,000 sellers who have joined these Amazon markets so far in 2021.

These four core markets, along with three other European markets (France, Italy, and Spain), and Amazon’s other international platforms, show the same pattern.

In January 2020, Chinese sellers accounted for 47% of new sellers, compared with 41% in January 2019. Amazon’s share in the United States more than doubled , from 28% in 2019 to 63% in 2021. Since March 2020, more than half of new sellers on the US site have come from China.

Amazon is a platform for Chinese brands to reach European and American consumers. Although the Universal Postal Union slashed subsidies for low-cost small package shipments to China last year, fast express delivery channels remain open to Chinese manufacturers.

Despite a doubling of shipping costs , trade from China through Amazon has not been hampered, thanks in large part to the FBA program.

Fierce competition among Chinese sellers

Perch , a company interested in acquiring and operating Amazon FBA businesses , found that about 45% of the top sellers on Amazon are located in China.

Nate Jackson, vice president of Perch, believes that 75% of Amazon's new sellers are in China and this trend will continue .

These figures may be partially exaggerated because some sellers operate multiple accounts. It is for this reason that competition among Chinese sellers is becoming increasingly fierce .

Jackson said most products sold by Chinese sellers use FBA and are delivered just as fast as items from other sellers.

The vast majority of Amazon shoppers don’t know who ’s selling the products. Many shoppers care more about price and convenience. They don’t necessarily know where the seller is located. But Amazon is increasing transparency into this. Stores in Europe and the U.S. already display seller information.

Private label sellers account for the majority

Often, people who shop on Amazon don’t understand the seller structure. There are two main types of sellers on Amazon .

1. Resellers. They may buy products from wholesalers at a lower bulk price and then resell them on Amazon at a higher price for a profit.

2. Private label sellers . Many sellers in China fall into this category. Instead of purchasing products elsewhere, they register certain products they produce as separate brands.

These sellers started out as manufacturers who made the same product for multiple companies, then decided to put their own labels on some of the products and sell them directly on Amazon.

Impact on the Amazon Ecosystem

As we all know, Amazon has always been centered on the end customer. For consumers, the customer experience is product variety, quality, customer service and price. For Amazon, increasing the number of sellers who can offer low prices is a good thing for customers.

According to Jackson, there are still some buyers who have negative feedback about Chinese freight companies . The feedback is mainly reflected in Amazon product reviews. Some consumers will give a one-star review just because it comes from China , without saying anything about the quality of the seller's product. It's really unethical!

But more Americans still support Chinese products. Rohan Thambrahalli, president of UpstartWorks, said that overall, the prominence of Chinese suppliers ultimately benefits Amazon's customer base, providing them with more choices.

However, this is also a bad change because consumers need to be cautious about purchasing products from potential counterfeit sellers. Amazon products may lack proper regulatory approval.

Tambulahari further explained that, for example, during the coronavirus pandemic , many sellers were selling fake disinfectants and personal protective equipment, while writing in the product descriptions that they had the effects of disinfection and killing viruses.

Made in China has great cost advantages

According to Chris Bell, founder and CEO of Perch , the increase in Chinese sellers has been going on for years.

This is the norm for anyone selling on Amazon or other marketplaces .

"This is a result of the continued globalization of the e-commerce market . There are low-quality and fraudulent sellers in China, the United States and all over the world. At the same time, there are also high-quality sellers, " he told the E-Commerce Times.

The advantage of Chinese suppliers over American or European suppliers is cost advantage. But they also face challenges in understanding local preferences, creating product listings that attract local customers, and optimizing products to compete with other sellers.

"Consumers around the world want quality products at great prices, and that's where great brand owners have an advantage , " Bell said .

Despite increasing competition from Chinese and U.S. sellers in most product categories, Perch has been able to maintain or grow market share because the company offers excellent products that receive good reviews and are priced convincingly. Those reviews are partly due to the excellent products and partly due to excellent customer service if problems arise, he added.

Globalization makes it difficult to sell a mediocre product at a high profit margin because people perceive good products as scarce due to the lack of better options . Bell believes that this trend towards unlimited choice through marketplaces such as Amazon and many suppliers competing for customers has created a need for everyone to constantly improve their game and stay competitive .

Bell concluded: “As long as Amazon sellers continue to serve their customers well and remain sharp on product , cost, and customer service, more sales can be achieved . ”

Amazon needs to improve quality control

Chinese sellers are particularly good at bringing products to market at lightning speed. Generally speaking, it may take six months to two years to launch a new product in the United States, but Chinese sellers can bring products to market in less than 90 days.

Due to such a rapid listing speed, Chinese sellers will continue to influence the Amazon ecosystem. This means that Amazon must continue to strengthen its brand certification and product review to ensure that the products listed for sale pass local and federal regulatory requirements.

In addition, with the frequent occurrence of product accidents on the platform, Amazon will need to work hard to prove the safety of its products, which is equally important for global sellers.

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