A Report Shows Amazon Used A Shell Company to Acquire Intels on Rivals like Walmart and Flipkart
A Report Shows Amazon Used A Shell Company to Acquire Intels on Rivals like Walmart and Flipkart
Analysts have stated that Amazon is falling behind Flipkart in India, and the latter remains to accelerate progress despite the intensifying competition in e-commerce.
Amazon, the preeminent global e-commerce company, reportedly used a shell company, Big River Services International, for years to gather intelligence on competitors including Walmart, eBay, FedEx, and others, according to a report in the Wall Street Journal. Although the primary objective of the project was to concentrate on U.S.-based competitors, its scope was expanded to include Flipkart in India, primarily due to the 2018 Walmart acquisition.
Originally referred to as “Project Curiosity” at Amazon, the initiative involved Big River Services International employees posing as sellers across various platforms in order to obtain pre-existing, exclusive data. Amazon subsequently utilized this data to modify its offerings in accordance with the competitive environment.
These advancements occur during a period when Amazon and Flipkart are engaged in continuous competition in India for a greater market share in electronic commerce. Previously, Bernstein analysts predicted that Amazon lagged behind Flipkart in India despite having invested more than $6.5 billion.
Keeping a close watch on competitors is not unique by any means. However, the intensity exhibits variation.
In order to prevent their cover from being revealed, Big River Services International employees were issued non-Amazon IDs for communication purposes. They managed an assortment of brands that were merely listed as vendors on various platforms. Crimson Knot, an Amazon subsidiary, entered the Indian e-commerce market dominance of Flipkart in March 2018. Concurrently, local media outlets circulated rumors circulating regarding a potential acquisition by Walmart. Walmart acquired Flipkart’s majority stake in May of that year.
Crimson Knot continues to utilize Flipkart’s logistics services for product storage and listing.
A spokesperson for Amazon stated that this is standard procedure followed by all businesses, including competitors, in order to remain competitive. “In business, benchmarking is a common practice.” An Amazon spokesperson told a famous news agency, “Amazon, like a number of other businesses, has benchmarking and customer experience teams that carry out studies on the opinions of customers, such as our selling partners, in order to enhance the way they are when they work with us.”
Till now, we have received no response from Flipkart regarding its inquiries.
According to sources who spoke with the WSJ, Amazon, on the other hand, briefed Big River Services International employees that in the event that their cover was ever exposed, they should explain that the organization was established to enhance the experience of sellers on Amazon and that such research is routine.
Additionally, the leadership was directed to communicate that the objective of the group was to enhance the Amazon.com merchant experience. In addition, they were instructed to emphasize that although Amazon monitors its competitors, it does not descend into an obsession. The report states that in 2017, Amazon formally changed the moniker of “Project Curiosity” to the Small Business Insights team in order to more explicitly define the project’s objective.
According to additional sources, such practices are prevalent in the industry, and a number of merchants are listed on a competitor’s platform despite being affiliated with a specific company. For example, Walmart has a presence on Amazon.com.
Amazon’s undertaking was not intended to generate revenue. The Indian Big River team anticipated expenditures of $463,000 and revenue of $165,000 for the year 2019, according to an internal company document cited by the WSJ.
The underlying motivation was, in fact, to anticipate a competitor’s move. FedEx, for example, introduced FedEx Fulfillment in 2017 as a competitor to Fulfillment by Amazon in the realm of logistics provision for vendors. The report states that Big River was admitted as an early customer into the FedEx Fulfillment program and that the team received early pricing, rate card, and other term information as a result of the partnership.
About The Author:
Yogesh Naager is a content marketer who specializes in the cybersecurity and B2B space. Besides writing for the News4Hackers blog, he’s also written for brands including CollegeDunia, Utsav Fashion, and NASSCOM. Naager entered the field of content in an unusual way. He began his career as an insurance sales executive, where he developed an interest in simplifying difficult concepts. He also combines this interest with a love of narrative, which makes him a good writer in the cybersecurity field. In the bottom line, he frequently writes for Craw Security.
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