COVID-19 And Predatory Pricing Online
Published: 2020-03-25 05:08:05

This blog an investigation into unfair pricing practices by sellers on amazon during COVID-19. We also look into some other details around reviews, discounts, and the time of listing of products. You can download the reference data here – Reference data.

As the world fights to contain the COVID-19. coronavirus disease, some people are using it as an opportunity to rip off people. Many countries are facing massive shortages of supply of masks. On Amazon and other eCommerce websites, prices for the masks have increased to the level of extortion.

We analyzed the product data on surgical masks from Amazon. We’re shocked by some of the business practices by sellers. In this blog, we are trying to find answers to questions you also might have. Let’s begin with the source data itself.
The data

We extracted product data from Amazon about surgical masks on 9th march. We used Datahut’s own Amazon data extraction platform to get the data. The data is available here for download—reference data. You read about doing it by yourself here – How to scrape data from Amazon

There were 350 products listed in Amazon, and at the time of the crawl, 141 of them did not have the pricing data as they were out of stock. We cleaned up the data using the Talend data prep tool ( Which is an excellent free data wrangling tool ). Then I loaded the data into an SQL database to conduct analysis.

We are going to analyze the different attributes of the data to find answers to your questions. We start with the date in which the product was first available on amazon.

The products first availability date

The date first available is a field in the data we extracted, which means the date at which the product was first listed on amazon by the seller. We analyzed the data based on the year the products got first listed, and here is how the visualization looks.  

Here are some interesting observations. 

    Out of the total 350 products, 191 of them got listed on Amazon in 2020, which is 54% of the total listed surgical masks.
    Out of the total 350 products, 155 products were listed from march 1 and 9, which is 44% of the total masks listed.
    The first surgical mask listed on Amazon was in 2014.
    Many of these new sellers are charging outrageous prices for a surgical mask.

Check out the data and see if you can find some things we missed about the products first availability date.
MRP or maximum retail price. 

By definition, the maximum retail price (MRP) is a manufacturer calculated price that is the highest price that is charged for a product sold. Some sellers are charging outrageous prices for an item like a surgical mask. This is not business, but extorsion. 

Out of 350 products, 141 of them doesn’t have pricing. This is because the seller did not update the pricing or the product was out of stock. For clarification, we are not showing those products in the following visualization, however, they can be found in the source data.  

Here are some interesting observations. 

    Out of 209 products with available pricing, only 52 are under a 500 rupees price bracket which is just below 25% and it is outrageous during a crisis like COVID-19. 
    Out of the 191 products got listed on amazon in 2020, only 15 of them are offering the product under 500 rupees. 
     Out of the 155 products that were listed from march 1 and 9, only 13 of them are offering the product under 500 rupees. 

Check out the data and see if you can find some things we missed about the MRP
Product sale price

Product sale price is the price at which the product is sold. On eCommerce stores like amazon usually, there are discounts and when you deduct it from the MRP, you will get the sale price. For surgical masks well, there were products that were sold at even 90% discounts. 

Out of 350 products, 141 of them doesn’t have a sales price. This is because the seller did not update the pricing or the product was out of stock. For clarification, we are not showing those products in the following visualization, however, they can be found in the source data.  The product sales price is the most important attribute we are going to look at during COVID-19.

Here are some interesting observations. 

    Out of 209 products with available pricing, 103 products are sold under the 500 rupees price bracket. Comparing to the MRP this is 51 more products in the same bracket. Aggressive discounting is the reason.
     Out of the 155 products that were listed from march 1 and 9, only 88 of them are offering the product under 500 rupees after discounting. 

Product Review statistics

A customer review is one of the best ways to influence a purchasing decision. The review statistics on amazon for surgical masks are amazing. You can see the visualization below.

Here are some interesting observations.

    Out of the 350 listed products, 233 of them doesn’t have a single review
    Only one product has more than 1000 reviews ( 1484 )
    Out of the 191 products listed in 2020, only 14 them have at least one review. 

Look at the data and find more interesting insights.
Discounting practices 

Platforms like Amazon and Flipkart were flagged by the competition commission of India for aggressive discounting practices. For surgical masks, the discounting practices of the sellers are outrageously aggressive. See the visualization below to get a glimpse of how discounting is done. 

Here are some interesting things.

    Only 8 products are selling at the MRP, which means zero discount. 
    Out of 209 products, 98 of them have 50% or more discount.
    96.6% of all the listed surgical masks have discounts on the MRP.

Following this type ugly discounting practices should be blocked by platforms, especially during a crisis like COVID-19.

(https://blog.datahut.co/covid-19-and-predatory-pricing-online/)

Conclusion.

Even though Amazon requires sellers to follow by its Fair Pricing Policy, which forbids listing items for significantly more than “recent prices offered on or off Amazon. However, many sellers have violated this policy during COVID-19. for an essential item like a surgical mask. They have used unfair and unethical pricing & discounting practices during a crisis like COVID-19.

We want to do a follow-up investigation into how the landscape of changes by crawling the same data again and analyzing it. You can download the data and join the list if you want us to share the analysis and data with you. Join the list

As a race, we humans are never stronger when tested. We will remain united and strong. We will beat COVID-19 together.

Stay safe. Wash your hands regularly. Spend more time with family.