During the last few years, Amazon, the e-commerce giant has been under the scanner for its various illegal activities include allegedly selling marijuana under the garb of online shopping in India. But, all those sins of amazon look pale to someone who is in the know-how of AmazonBasics’ open flouting of quality protocols to conn its customer base.
AmazonBasics-What it is?
In short, along with selling electronic products of Apple, Samsung, Nokia, or any other company on their platform, Amazon decided to sell unverified and unbranded electronics by claiming that the products are owned by Amazon itself.
The AmazonBasics turned out to be the best performing underdog of the parent brand within a decade. In 2017, the private label was termed as the best-selling brand on Amazon.com. A key point to note here is that Whole Foods became the number-2 selling private-label brand that Amazon offers. The success registered by whole foods came within four months of its registration as a “private-label brand” on the platform.
Basics started to expand its product range in November 2018
Slowly, the company started to expand its product range and brought various products under the horizon of AmazonBasics. In November 2018, AmazonBasics expanded the product line to include home improvement items, offering kitchen and bath hardware.
Within one month, the tech and e-commerce giant started to sell toys on its AmazonBasics platform. It launched a toys lineup under the four categories called AmazonBasics Soft Play Single Tunnel, AmazonBasics Soft Play Climber, AmazonBasics Soft Play Climb and Crawl Play Set, AmazonBasics Kids’ Toy Storage Organiser.
According to an analyticgroupqz.com, Amazon sold more than 1,500 products on its Basics platform in 2017. It is only logical to claim that the number of products sold under private-label must have crossed 3,000 in number.
Launched Basics in India in 2015
While Basics was gaining momentum all around the world, Amazon decided to bring the private label into the Indian market. Amazon India, a subsidiary of Amazon Inc launched its Basics series in 2015 in India. In 2019, the company announced that it will launch the integrated shopping experience for its consumers by aligning its Basics with brick-and-mortar shops in the country. For this purpose, it had already laid out a roadmap in 2017, when it bought a 49 per cent stake in future coupons, which own more than 1,400 Big Bazaar and EasyDay stores.
Amazon’s claims and nefarious intention is hidden behind it
While on its face, it looks like a noble cause to integrate India’s Kirana stores to Amazon Basics, the truth is exactly the opposite of the stated intentions.
There are millions of small shopkeepers wishing to sell their products in India’s huge consumer market. On the flip side, there is a parallel economy of duplicate products which run through their sales at cheaper prices in black markets.
A prime example of this duality is available in Delhi’s Connaught Place. While the place itself is the 9th most expensive market in the world, a black market called Palika bazaar runs in the vicinity where the similar-looking bad-quality copy of the original product is sold at one-tenth of the price in the original market.
Malpractices at the mass level
The products being sold through the Basics platform of Amazon bode of similar malpractices. For example, various mini-factories, some of which are home-based claim that they produce data cables, Bluetooth, earphones, and similar other mini electronic equipment.
These products are low-priced and poor in quality. Such products are generally sold in local markets for a price much higher than manufacturing cost, but much less than original branded products like that of Samsung, Apple, etc.
AmazonBasics has the potential to sell these low-quality products at higher prices to its consumers. The idea is simple, buy a bulk of products at low prices from these mini-factories, pack them and label them as a product of AmazonBasic, and no one will question it.
People pay hefty sums of money to buy a branded product in India. It is easy for multinational giants to sell low-quality products with skyrocketing prices for a company like Amazon.
One more area which Amazon can easily exploit is the illegal import of Cheap Chinese products in India. Since they tend to be cheaper than local Indian produces, Amazon has every reason in the world to illegally import them and sell them off by rebranding them as “Made in India AmazonBasics” products.
Simply put, anyone can sell their products at a higher price by pasting the AmazonBasics sticker to it.
Amazon’s records do not promise good intention
If previous evidence is anything to go by, it is pretty clear that Amazon will stay away from exploiting loopholes to sell illegal and poor quality products. The company has invited a lot of ire from everybody including ministers, the Judiciary, the market, consumers and law-enforcement agencies.
Various eminent individuals including Commerce minister Piyush Goyal have already warned Amazon against its malpractices in the country. Moreover, after being in the probe for allegedly selling Marijuana, people’s trust is at its lowest on Amazon. AmazonBasics will turn out to be the final nail in the coffin for Amazon India.