Amazon Swatch Deal Goes Bust Over Counterfeit Concerns

A deal between Amazon and Swatch — one that would have seen the watch company offering its brands like Omega and Blancpain on Amazon’s site — has fizzled out, according to The Wall Street Journal. And, reports indicate it has fizzled in such a way as to highlight Amazons’ growing difficulty attracting high-end and luxury partners to sell on its site.

Amazon, like its Southeast Asian counterpart Alibaba, has a counterfeit problem, the WSJ reports, and luxury goods thriving on exclusivity in their offerings are a magnet for widespread fakery. That fakery makes exclusivity difficult to maintain.

According to WSJ reports, this led to the Amazon deal breakdown. Swatch “demanded a commitment” from Amazon that it would actively search the site for fakes and unauthorized third-party retailers. Amazon refused, and Swatch reportedly lost interest.

This was not Amazon’s first dust-up with an exclusive brand. In July, Chanel won a court judgment against Amazon over 30 Amazon sellers peddling fake Chanel-branded goods on the Amazon Marketplace. The company sued for $2 million from each defendant for every fake item peddled, but the court instead awarded a default judgment of $100,000 per item — about $3 million in total.

Amazon has given sellers tools to make it easier for sellers to get more control over their products but draws the line at having to police its massive marketplace for fakes, though it does react to complaints.

Whether Amazon or Swatch has made a bad decision remains to be seen. Amazon may have lost a big chance at growth in a new segment — luxury goods — just as reports from Fung Global Retail & Tech (FGRT) indicate eCommerce is the fastest-growing distribution channel globally for such products. But, Amazon has a long history of persuading merchants to come long and, if one or two luxury retailers give in to Amazon, it might be enough to push others for fear of being left behind.