Friendly reminder: Order manipulation and review manipulation carry serious risks for merchants. Buyers who help with fake orders or fake reviews also take on risk themselves, and may easily be flagged by Amazon US. If that happens, becoming a seller in the future is basically out of the question. This time, Amazon’s enforcement was extremely broad: stores were shut down for almost any suspected involvement, and even sellers who did not manipulate reviews but were frequently associated with buyers who did were reportedly caught up in the crackdown.

This article is reposted from Tencent News, May 10

A bombshell story emerged today in the cross-border e-commerce industry: Amazon stores belonging to four of Shenzhen’s “Five Tigers” of cross-border e-commerce were suddenly shut down. None of the products under those stores could be displayed normally, and clicking on product links brought up Amazon’s familiar dog error page instead.

According to reports, the most direct reason these major cross-border e-commerce companies had their stores shut down was review manipulation. These companies allegedly hired specialized firms to generate fake reviews and even fake sales volume. Recently, however, one company focused on manipulating data reportedly leaked 13 million records due to poor internal controls. The leaked data involved 200,000 to 250,000 buyers (editor’s note: the incident was even featured prominently in major US media, leaving Amazon embarrassed and forcing it to respond).

After the data leak, Amazon reportedly traced the information back and identified marketplace sellers suspected of order manipulation, then directly shut down the stores under suspicion. Among those affected were four of Shenzhen’s Five Tigers of cross-border e-commerce.

Cross-border e-commerce has boomed in recent years, with extremely rapid growth. According to customs statistics, China’s total cross-border e-commerce imports and exports reached RMB 1.69 trillion in 2020, up 31.1%. Of that, exports totaled RMB 1.12 trillion, up 40.1% year over year.

Against this backdrop, many people have made enormous profits from cross-border e-commerce. For example, Shenzhen’s well-known “Five Tigers” in the sector have generated very substantial annual revenue.

The so-called Shenzhen cross-border e-commerce Five Tigers, also known as the Bantian Five Tigers, are Lansi Technology, Zehui, Baoshijia, Gonglang, and Jiandanwang. In addition, there are the “South China Four Young Masters”: Aoki, Youkeshu, Tongtuo, and Saiwei. These cross-border e-commerce companies all rank relatively high within the industry.

These companies mainly rely on platforms such as eBay, Amazon, AliExpress, and Wish, listing products at massive scale and generating huge transaction volumes every day.

For example, Lansi Technology is the top seller by sales volume on Wish and is also representative of the platform’s mass-listing model. Its SKU count reaches into the tens of thousands, and because it lists so many products, its annual sales volume is correspondingly enormous.

These companies were able to ride the wave of cross-border e-commerce and keep expanding for several reasons. One is that they entered the field very early: for example, Zehui was founded in 2003, Baoshijia in 2007, Lansi Technology in 2007, Jiandanwang in 2010, and Gonglangwang in 2011. These companies were established relatively early and entered the industry when cross-border e-commerce was just taking off.

Another reason is that China, as the world’s largest manufacturing country, exports huge quantities of goods around the globe every year. By leveraging China’s low-cost product advantage, these companies have done very well.

A further factor is that many companies brought tactics common in China’s domestic e-commerce market into cross-border e-commerce—namely, order manipulation.

At present, order manipulation is a serious problem across China’s major e-commerce platforms. Many stores with strong sales figures are involved in it to some extent. Both sales volume and reviews can be fabricated. Around this practice, a complete industry chain has already formed in China, with clear divisions of labor from taking business orders, to recruiting participants, to even using machines to generate fake orders.

Many manipulation platforms exploit loopholes in the marketplace to keep generating fake orders, then push products and stores into trending sections or even onto the homepage, thereby driving store sales. These sales figures are a mix of real and fake, making them difficult for consumers to identify. Even when some stores have only average products, many consumers still end up buying from them because the sales numbers look hot and the platform recommends them.

This model may work well in China’s domestic e-commerce market, but it does not necessarily work overseas. On large international platforms such as Amazon and eBay, enforcement against order manipulation is much stricter. These platforms place more emphasis on product quality and on accurately presenting product performance. They do not allow excessive packaging or misleading promotion; instead, they want consumers to see products’ strengths and weaknesses as they really are and make their own choices.

However, some Chinese cross-border e-commerce companies have continued to ignore platform rules and to apply the same domestic manipulation tactics overseas. Over the past several years, many cross-border e-commerce companies benefited handsomely from this behavior because as long as the platform did not detect it, they could keep pushing products into hot rankings. For the biggest players in particular, generating hundreds of thousands of orders a day was not unusual.

But things did not go as planned. Because the data-manipulation company failed to secure its information properly, the fake-order data leaked and Amazon caught them red-handed. Amazon was also under significant pressure over this issue, as many major US media outlets were reporting on it. As a result, Amazon moved decisively to shut down stores suspected of manipulation. Whether a seller was large or small, the message was zero tolerance for violations.

So in this wave of store closures, even veteran major sellers such as the South China Four Tigers were unable to escape unscathed.

These store shutdowns should serve as a warning to all sellers. Whether selling in physical stores or online, businesses still need to operate with integrity. Manipulating orders may boost store sales in the short term, but it is fundamentally deceptive behavior. This may not have much impact domestically, but overseas this playbook does not work. Sellers need to focus on building good products and providing good service if they want to succeed over the long term.