Amazon's top sellers: It is recommended to "increase the intensity" for Chinese sellers

In 2024, the number of Chinese sellers on the Amazon platform exceeded 50% for the first time . In the fourth quarter of 2024, Chinese sellers accounted for 62% of the sales volume on the Amazon platform, a record high .

However, this trend has exposed the increasingly sharp conflicts between Chinese sellers and domestic American sellers.

A report from the Center for Cross-Border Trade Research at Georgetown University pointed out that if the proportion of Chinese sellers continues to exceed 50% , the survival rate of small and medium-sized sellers in the United States will fall below 35% by 2030.

The clash between Chinese and American Amazon sellers

Behind this competition is an all-round collision between Chinese and American sellers in terms of rule understanding, operational strategies and resource integration.

Shinghi Detlefsen , a former Amazon employee and current Amazon seller, has a deep understanding of the current phenomenon : "In 2010 , Amazon used the 'Chinese merchant avalanche' strategy to rapidly expand its product categories - but at the cost of severely squeezing the living space of small and medium-sized sellers in the United States . "

As an Amazon employee in 2010, Detlefsen witnessed the company 's massive recruitment of Chinese sellers to expand its product categories , a phenomenon known internally as the "Chinese merchant avalanche." When he became an Amazon seller, he found that his Chinese competitors often gained the upper hand through structural advantages such as tax incentives and regulatory arbitrage.

Detlefsen pointed out: First, Chinese sellers can take advantage of the "de minimis" trade rules to exempt orders below $800 from tariffs; second, large American sellers have to pay tens of thousands of dollars in liability insurance each year, and some Chinese counterparts circumvent this cost through offshore company structures; in addition, Chinese sellers can quickly achieve the full chain response of "design-production-logistics" by relying on the industrial clusters in the Yili Delta and the Yangtze River Delta, and shorten the new product listing cycle to less than 7 days. Finally, some Chinese sellers will take aggressive competitive measures, including giving false negative reviews to competing products.

Amazon has also taken action against the improper behavior of some Chinese sellers: Amazon's large-scale account blocking incident in 2021 caused an earthquake in the industry , and many top sellers were affected at the time , but this did not reverse the dominant position of Chinese sellers .

On the other hand, Detlefsen believes that Amazon's platform algorithm is more inclined to low-priced goods, and Chinese sellers often occupy the top search results due to their cost advantages. An American seller in the home furnishing category revealed: "Similar products are priced at $15.99 to break even, but Chinese sellers directly mark the price at $9.99 and include free shipping , so we can't compete at all . "

In order to change this situation, Detlefsen and other American sellers formed an alliance and proposed five major reform proposals to the US government:

1. End the small tax exemption rule: cancel the tariff exemption for orders below US$800 and block the "ant moving" tax evasion;

2. Forced localization: requiring foreign sellers to register U.S. entities and pay income tax, eliminating the advantages of offshore structures;

3. Establish a responsible person system: overseas sellers need to provide a million-dollar liability guarantee to match the insurance costs of their American counterparts;

4. Information transparency: The platform publicizes the seller’s nationality, commodity tariffs and quality inspection information to eliminate consumer cognitive bias;

5. Intellectual property review period: A 90-day pre-sale buffer period is set for the government to verify patent infringement risks.

These American sellers believe that if these proposals can be passed, Chinese and American sellers will truly start from the same starting line and compete fairly.

Of course, not everyone is hostile to Chinese sellers. Juozas Kaziukėnas, founder of Marketplace Pulse, pointed out: "40% of American sellers actually purchase similar products from China. The so-called 'anti- Chinese seller proposal ' is actually an internal struggle for interests in the upstream and downstream of the supply chain." In addition, if small tax exemptions are completely abolished, American consumers will face a price increase of about 12%, which may trigger a new round of inflationary pressure.

Walmart is following Amazon's path

Data shows that 41% of Walmart's new sellers in 2024 are from China, and during the outbreak period from March to April, this proportion even climbed to two-thirds. Compared with the historical low of less than 1% of Chinese sellers on the Walmart platform at the beginning of 2021, the speed of this "blitzkrieg" caught American merchants off guard.

Walmart's "blitzkrieg" offensive against Chinese sellers is not only reflected in the expansion of the scale of investment promotion, but also in the systematic reconstruction of its strategy. In 2024, the number of new Chinese sellers on Walmart's e-commerce platform will exceed 160,000, a year-on-year increase of 60%. Behind this growth rate is the platform's in-depth layout and rule reshaping in the Chinese market.

It is understood that since Walmart opened its doors to Chinese sellers in 2021, it has gradually lowered the threshold: from the initial requirement for annual GMV to be no less than US$3 million, to completely lifting the GMV restriction in 2023, and launching a Chinese version of the Seller Center, allowing cases to be submitted in Chinese, and other localized services.

In 2024, Walmart will further increase its investment and launch the "10 Cities Chasing the Wave" offline investment promotion tour, going deep into industrial belt cities such as Shenzhen, Guangzhou, and Hangzhou, directly connecting with supply chain resources, and even launching a "New Seller Incentive Program" for Chinese sellers - including up to 75% sales commission reduction, US$2,000 logistics fee discount, US$1,000 advertising credits, etc., with a total discount amount of up to US$75,000.

This series of measures has significantly shortened the entry period for Chinese sellers. For some sellers, it only takes 7 days from application to listing, while the average review period for domestic US sellers is still as long as 30 days.

At the same time, Walmart has pushed low-priced products to the top of search results through algorithm optimization and advertising resource allocation. For example, among similar products, Chinese sellers can get exposure on the homepage when they mark the product at $9.99 with free shipping, while American sellers, due to cost pressure, set the price at $15.99, and the traffic weight drops significantly.

However, although Chinese sellers contributed more than half of the new SKUs on the Walmart platform, their aggressive strategy has also caused considerable controversy. In 2024, Walmart's customer complaint rate increased by 18% year-on-year, mainly focusing on issues such as inconsistent product descriptions and logistics delays.

It can be said that behind Walmart’s rapid growth is the dilemma of strategic trade-offs: if it continues to rely on Chinese sellers to expand its product categories, it may lose its positioning as a “quality e-commerce”; if it tightens its policies, it will be difficult to maintain its 27% growth target.

Some industry insiders believe that the competition in cross-border e-commerce has now escalated from a "commodity war" to a "rule war." When Chinese sellers use the "Shenzhen speed" to rewrite the rules of the game, the counterattack of local American forces is both a commercial appeal and a struggle for cultural identity. There is no simple answer to this game, but what is certain is that whoever can find the golden section between efficiency and fairness will win the next decade.

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Chinese Sellers

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