This is the Lab in China Where Amazon’s Biggest Sellers Are Made
Have you ever heard of China South City? Probably not. But if you're an Amazon seller you should know about it.
China South City is located in Shenzhen China and is basically the Mecca of Chinese Amazon sellers. It's a massive building complex where nearly every single one of the China's largest Amazon sellers either has an office or has had an office.
You know how some people think COVID came from some laboratory in Wuhan? Well, China South City is essentially the Wuhan Laboratory of Amazon every Amazon marketing tactic you know, whether white hat or black hat.
A few weeks ago I had the chance to visit China South City and talk to numerous businesses there. Here's what it's inside.
Where is China South City?
China South is located in Shenzhen in a district called Pingshan. It is way on the outskirts of Shenzhen, about 60-90 mins from the downtown core of Shenzhen.
If you look at China South City from the outside it looks like a massive shopping mall and the first couple of floors inside even look like a shopping mall. However, this massive building has about 10 floors and all of the other floors are essentially dedicated to Amazon sellers. There's hundreds, perhaps thousands, of China's largest Amazon sellers based in this one building.
There used to be even more sellers in China South City. However, because of a couple of factors, specifically a slow economy especially in America and massive Amazon suspension sweeps which they did in 2021/2022 for review fraud, this number has gone down significantly over the last couple of years (more on that shortly)
What Chinese Sellers & Companies Are At New South City?
Essentially all of the major Chinese Amazon sellers have offices or have had offices in China South City. Some you may have heard of, such as AUKEY (now AUGROUP) or TomTop, and most you will have never heard about.
However, in addition to the massive sellers, the complex is also home to smaller sellers as well operating in tiny offices and workspaces.
Finally, basically every service an Amazon Seller needs is available directly at Chinese South City, whether that is logistics, photography, or product launch help.
The availability of these services (and often at extremely affordable prices) is just one of the many advantages Chinese sellers get over their Western counterparts.
The Largest Amazon Mastermind on the Planet
If you've ever been to China, you know that similar industries tend to bubble together. All the toy manufacturers are around Zhejiang, automotive parts sellers are around Anhui province…and Amazon sellers in Shenzhen and Guangdong province.
Often the Chinese government subsidizes things like China South City to encourage growth. The Chinese government loves Amazon sellers because they're exports and all governments love exports.
As Western ecommerce sellers we also like to poopoo on China and Chinese sellers for being all black hat and that's the only reason they succeed (I'll get to that in a second) but China South City is an example of the other reality: sometimes Chinese sellers just have better tactics. In this case, China sellers (and the Chinese government) knows that if you put hundreds of ecommerce sellers together in the same building they're all going to learn and grow together. It's basically like the world's largest Amazon mastermind happening 7 days a week.
I seen this first hand as the CEO of an Amazon business gave me a tour of South City and introduced us to all of his friends in the building. Spoiler, basically every business in the building was his friend. The networking was unreal. Whereas in the West we might get together once or twice in a year to network, these guys are networking and masterminding every single day. China South City is essentially the largest Amazon seller mastermind operating 7 days a week.
Like it or not, Chinese Amazon Sellers are working hard.
Work Hard…Legally or Illegally
Like I mentioned, Chinese sellers at China South City are working hard…freaking hard in fact. But let's also not kid ourselves: a lot of black hat tactics are going on as well.
To see the scale of the problem you need to look no further than the number of vacant office spaces which currently exist. This didn't used to be the case – previously China South City was bursting at the seams with Amazon sellers, even more than it is today. But that all changed in 2021/2022.
In late 2021, Amazon did one of its largest Amazon suspension sweeps when it banned hundreds of the largest sellers (and smaller sellers as well) for review manipulation. Basically many Chinese sellers at the time were paying customers to leave positive reviews of their products. It resulted in the suspensions of companies with hundreds of millions of dollars in revenue, including MPOW and AUKEY.
I spoke to one “smaller” seller who had 400 staff in 2021 but had to lay off all but 20 after their account was suspended at this time.
How prolific are black hat tactics at China South City currently? It's hard to say and it appears many sellers have been genuinely ‘scared straight' by Amazon. However, there is one very illegal tactic most sellers I spoke to were using.
Duty Manipulation & Evasion is Prolific
Currently the United States has imposed an additional 25% duty on most Chinese goods and seems set to raise them again. But this isn't a worry for most Chinese sellers.
Almost every single Amazon seller I spoke to in China during my trip was employing duty manipulation of some degree. This could be everything from under-declaring the true value of goods to using false HS codes which avoided the 25% duties.
Chinese sellers can avoid duties with more or less impunity as the U.S. government can't seize the assets of Chinese companies like it can for U.S. companies. And even if a Chinese company gets barred from importing into the U.S. they'll simply open another company.
The U.S. basically has the classic crime problem: laws mean little if there's no way to enforce them.
Moving Away from Amazon and Towards Temu & TikTok
I mentioned that Chinese sellers have, more or less, been scared straight from doing black hat tactics on Amazon. This has been good and bad news for Amazon.
The good news, for Amazon, is that Chinese sellers are manipulating the platform. The bad news is that many sellers have viewed Amazon's suspension punishments (which have often been permanent and irreversible) as being unjust and overly-punitive.
The consequence is that almost every Chinese seller I spoke to saw their future growth not on Amazon but on TikTok Shops and TEMU.
This push off of Amazon is more than just lip-service. The aforementioned AUGROUP went public in November of 2024 and public financials revealed that Amazon went from 84% of their revenue in 2021 to just 53% in 2024. This could be bad news long term for Amazon.
Conclusion
A trip to China South City reveals the true power and magnitude of the Chinese ecommerce ecosystem. This Chinese Amazon seller laboratory has a checkered past when it comes to utilizing black hat tactics to manipulate the platform. However, there's also no denying the motivation and overall work-ethic of the sellers.
China South City also showed the skepticism Chinese sellers (and all sellers for that matter) feel towards the long-term prospects of Amazon overall. Eventually, China South City may turn from the Amazon Seller Laboratory of China to the TikTok & Temu Seller Laboratory.
