[ad_1]
Keeping an eye on rivals is not new by any means. (Representative image)
The developments come at a time when analysts have said that Amazon lags Flipkart in India and the latter continues to make strides even as e-com wars heat up
Global e-commerce giant Amazon operated a shell company – Big River Services International – to collect intel on rivals like Walmart, eBay, FedEx and others for several years, as per a Wall Street Journal report. While the main focus of the project was to concentrate on competitors based in the US, the reach even extended to Flipkart in India, primarily because of the Walmart acquisition in 2018.
At Amazon, the project was initially called “Project Curiosity” and employees of Big River Services International posed as sellers on multiple platforms to gather exclusive information beforehand and pass it on to Amazon which later used the information to tweak its offerings as per the competitive landscape.
These developments come at a time when Amazon and Flipkart are constantly fighting it out with each other in India to grab a bigger piece of the e-commerce pie. Analysts at Bernstein earlier said Amazon lags Flipkart in India despite an investment of over $6.5 billion.
Keeping an eye on rivals is not new by any means. The intensity, however, varies. Moneycontrol had previously reported that Flipkart had set up a war room comprising 20-30 executives dedicated to track the moves of SoftBank-backed Meesho.
Employees of Big River Services International were given non-Amazon IDs to communicate and ensure their cover was not blown. They operated multiple brands that were listed as mere sellers on platforms. In India, Amazon gained access to e-commerce giant Flipkart in March 2018 with the Crimson Knot brand, around the time rumours of a Walmart acquisition swirled in local media. Walmart bought a majority stake in Flipkart in May of that year.
Crimson Knot still lists products on Flipkart and stores them with Flipkart’s logistics services.
An Amazon spokesperson said this is common practice and all companies, including rivals do it, to stay on top of competition. “Benchmarking is a common practice in business. Amazon, like many other companies, has benchmarking and customer experience teams that conduct research into the experiences of customers, including our selling partners, in order to improve their experiences working with us,” an Amazon spokesperson told Moneycontrol.
Flipkart did not respond to Moneycontrol’s queries.
Amazon, however, prepared employees of Big River Services International and told them that if their cover was ever blown, they should tell people that they’re a group which was formed to improve the seller experience on Amazon, and say that such research is normal, sources told the WSJ.
The leadership was also instructed to say that the group’s purpose was to improve the seller experience on Amazon.com. Additionally, they were told to emphasize that while Amazon pays attention to competition, it does not become obsessed. In 2017, to make the project’s purpose clearer, Amazon formally renamed “Project Curiosity” to the Small Business Insights team, according to the report.
Sources also said that such practices are common across the industry and several sellers, despite being associated with a particular company, are listed on a competitor’s platform. Walmart for instance sells on Amazon.com.
Amazon’s endeavor wasn’t designed to make money. In 2019, for instance, the Indian Big River team projected revenue of $165,000 while it expected costs of $463,000, the WSJ reported citing an internal company document.
The motive was in fact to know a competitor’s move before anyone else. For instance, FedEx in 2017 launched FedEx Fulfilment, a competitor to Fulfilment by Amazon, for offering logistics to sellers. Big River was accepted into the FedEx Fulfillment program as an early customer, and the team received early details about pricing, rate cards and other terms as a result of the partnership, the report said.
[ad_2]
Source link
