Alibaba and Amazon's International Marketplace Part 2

When a company is able to put up numbers like Alibaba’s insane Singles’ Day 2018 sales, it’s clear that they are a force to be reckoned with -- or, in Amazon’s eyes, a force to be emulated.

However, Alibaba’s disruptive business practices have netted them a series of controversies.

AliExpress refuses to provide protection for buyers. In instances where items are seized by customs, Alibaba refuses to reimburse customers. There is also a high volume of cases where customers receive counterfeit or fraudulent items and the sellers are able to vanish from the marketplace without a trace.

These same fraudulent sellers who make a fortune scamming AliExpress customers jumped at the chance to get on Amazon’s open marketplace. Any open marketplace like Amazon’s is going to have its share of scam artists. The difference here is that China’s lax business regulations make it easier for scam artists to get away with it.

There are also several high-profile cases where users have attempted to buy or sell uranium on the AliExpress marketplace in order to create dangerous weapons. According to Reuters, American agents posing as brokers from Iran attempting to buy 1,000 tons of yellowcake uranium from a seller on Alibaba arrested a man in New York’s John F. Kennedy airport who smuggled a sample of the dangerous material in his luggage.

The Financial Times reported in 2014 several instances where sellers attempted to sell high-strength filament, created Tokyo-based company Toray. This material is extremely strong and as a result is powerful enough to be used in supersonic subterfuges necessary to enrich uranium and get it to the point where it can be weaponized.

But let’s take one big old step back. Does this mean that users on Amazon are buying and selling uranium? We’ve never tried it, but it would be safe to assume that the answer to that question is a conclusive “no.” While Amazon and other American companies might be tweaking the way they do business in order to adapt to and compete with the rapidly ballooning Chinese market, there are still regulations in place that companies must follow when doing business in America.

This doesn’t mean, however, that these changes in business practice haven’t left the Amazon marketplace a little more prickly than it might have been before. For example, in a previous post, we covered how signs like extremely long shipping times are red flags that the item you’re interested in ordering may be coming from China. However, sellers in China are not required to disclose whether or not they are shipping from China. In addition, some of these sellers claim to be based in the U.S., creating further confusion about where your item is actually coming from.

Amazon does their best to police their marketplace and to ensure that it’s fair for both sellers and buyers, but the sheer number of transactions that the site has to process on a minute-to-minute basis makes this incredibly difficult. Scam artists and fraudulent sellers don’t slip through the cracks -- they use the door. Amazon’s support staff could populate a small country, yet they are still poorly equipped to deal with the pitfalls of a global marketplace.

Buyers receive fraudulent or faulty product -- in some cases, buyers receive the wrong product and, in other cases, nothing at all -- and honest users find themselves in price wars with faceless, international sellers they couldn’t possibly compete with.

There are still perks inherent to an open marketplace. In fact, a large number of Amazon users will never have to deal with what we have outlined here (unless they are trying to buy uranium). A lot of good folks benefit from the lower prices made possible by the open, international market. There are honest international sellers too who are now making a living that they once saw as forever out of reach.

Regardless of how you feel about the business practices of Amazon and AliExpress, the shockwaves they have sent through ecommerce and global business are not only undeniable but ambiguous. Businesses and governments are still struggling to keep up with the growth of international online marketplaces and its effects on global trade and tax collection.

How this affects shoppers and sellers, and how they enjoy commercial holidays like Prime Day -- or Singles’ Day, depending on where you find yourself -- is more immediate. In the already confusing world of ecommerce on Amazon, shoppers now have to be knowledgeable enough to put themselves one-step ahead of the prickly sellers, exorbitant shipping times, and fraudulent product of the international marketplace.