Vietnamese company sues Amazon for $280 million
A Vietnamese company has filed a lawsuit against Amazon asking for $280 million. Amazon has not commented on the case yet.
According to Bloomberg, Gilimex has sued Amazon, saying that its orders are shrinking. Its factory has faced difficulties due to having no orders, while production capacity and raw materials is more than adequate.
Since 2014, Gilimex has been a partner of Amazon. It invested tens of millions of dollars in building factories and warehouses to contain Amazon’s goods. It employed over 7,000 employees to produce more than 1 million boxes each year. Production output for Amazon has increased 20-fold over the past eight years.
It also adjusted its factory capacity, and arranged employees to meet Amazon’s demand at the time orders rocketed during the pandemic.
In April-May 2022, Amazon reduced demand expected for the remaining time of 2022-2023.
According to the lawsuit filed with the Supreme Court of New York (USA), Amazon was its largest customer, with orders worth $146.6 million in 2021. In order to meet demand for the e-commerce platform, the company rejected many other major customers such as IKEA and Columbia Sportswear, and relocated its production and packaging facilities.
Amazon earned unprecedented revenue growth during the pandemic largely due to an explosion in online ordering while Gilimex’s managers and employees risked every day to literally set a record. Gilimex has accused Amazon of unfair trade practices, breach of contract, and breach of fiduciary duty.
Amazon’s demand led Gilimex to invest significantly in factories. The business is now stockpiling worthless raw materials.
Gilimex claims compensation of about $280 million to cover costs, which include costs for containers and boxes it has produced, raw materials it has purchased, and investments in facilities during the pandemic.
An Amazon spokesperson said the company had no comment on the case.