Amazon India is likely to give job offers to over 400 employees at Cloudtail India, as the top seller on the e-commerce behemoth's platform will cease its operations soon. Sources in the know confirmed to Business Today that the transition of services at Cloudtail India has begun with the inventory shifting to other sellers. Cloudtail India, as per its official LinkedIn page, has 445 employees in India and was set up in 2014 as a joint venture between N.R. Narayana Murthy’s family office, Catamaran Ventures, and Amazon India.
“Amazon will place the job offers to the employees at Cloudtail and they will be free to decide whether to continue or not,” one of the sources said. Cloudtail India is now a wholly-owned subsidiary of Amazon India after the e-commerce giant acquired the 76 per cent of Catamaran Venture’s stake in Cloudtail at an undisclosed value.
Sources say that Amazon’s decision not to continue with operations at Cloudtail India is to conform to the proposed e-commerce regulations in India which prohibit the online marketplaces from owning any direct stake in the seller entities. Amazon’s senior leadership in India has held series of talks with the government officials during which the foreign e-tailers have expressed displeasure at some of the proposed rules, which, as per them, could stifle the industry.
Detailed queries sent to Amazon India and Catamaran Ventures by Business Today did not elicit any response. The e-commerce industry in India, as per consulting firm RedSeer, is dominated by Amazon and Walmart-owned Flipkart, which together commands more than 80 per cent market share. However, homegrown corporate giants, such as Reliance and Tata Group, are also actively making their inroads into the $50 billion online commerce industry.
As per a joint statement issued by Amazon India and Catamaran Ventures last year, the joint venture, which was up for renewal on May 19, 2022, would cease to exist. The companies said that Cloudtail India enabled over 300,000 sellers and entrepreneurs to go online and the top seller also enabled 4 million merchants with digital payment capabilities.
However, the various retail trade bodies have been contending that Cloudtail India was driving more than 90 per cent sales on the Amazon platform, leaving other sellers in a disadvantageous position.
Amazon, on its part, has maintained that it was abiding by the regulations which stated that no seller on an online marketplace can contribute to more than 25 per cent of the overall sales. As per the regulatory filings of Cloudtail India, net profits of the seller jumped by 171 per cent year-on-year (YOY) to Rs 183 crore in FY21.