Shenzhen is offering 2 million yuan in subsidy to each independent online store built by Chinese cross-border merchants as Amazon’s crackdown on fake products, review fraud and other violations has hit some of the biggest Chinese sellers on the platform.
Detail:
In August 13, the Shenzhen Municipal Bureau of Commerce held a closed-door seminar with some leading Chinese cross-border e-commerce platform that were affected by Amazon’s crackdown.
The meeting aims to learn the financial difficulties that Chinese cross-border merchants went through and find effective solutions to help lift cross-border e-commerce merchant out of the difficulties.
As part of the solutions, the Shenzhen Municipal Bereau of Commerce said it would grant 2 million yuan in subsidy to each independent online store built by the merchants themselves.
To qualify, applicants must have started operation before 2019 and have healthy cash flow with monthly sales of USD300,000 in average or more. In addition, each applicant must submit no more than 2 independent online store to gain the approval.
“To solve the challenge, these Chinese merchant sold on Amazon will either run their own independent websites or turn to other online retail platform such as Aliexpress or Ebay, said Wang Xin, executive chairman of Shenzhen Cross-Border E-commerce Association.
Context:
At least 50,000 Chinese merchants have been ceased operation by Amazon since May due to violation of the company’s rules, according to statistic from the Shenzhen Cross-border E-commerce Association.
In a document filed to the Shenzhen Stock Exchange, Tiza Information Industry Corporation, the parent company of Shenzhen Youkeshu Technology Co warned its investors that company’s total revenue expects to drop by 40%-60% as Amazon suspended Youkeshu’s 340 onlines store for policy violations like fake customers’ review.