Amazon & Cloudtail to end seven-year-long partnership in India

Amazon India and the parent company of Cloudtail have announced to end their seven-year long joint venture/ partnership in India after the Supreme Court said that it would not halt the probe into anti-trust motion against the largest players in India’s e-commerce platform, Amazon and Flipkart. 

Cloudtail is the largest seller on Amazon.in Its parent, Prione Business Services is jointly owned by Catamaran which is led by Infosys founder NR Narayan Murthy and Amazon. Catamaran originally held 51% in the joint venture, further raising its stake to 76% in 2019 after the government of India released a notification Press Note 2 a year earlier. According to the note the provision does not allow group companies to sell on the platforms Amazon and Flipkart.

Press Note 2 followed allegations by local trading bodies that sellers owned by large companies on e-commerce platforms, like Cloudtail on Amazon and WS Retail on Flipkart, offered deep discounts and thereby owned a large share of business. As a result smaller businesses were suffering because of these anti-competitive practices. 

Amazon and Catamaran said in a joint statement, “The two partners today announced they have mutually decided to not continue their joint venture beyond the end of its current term.”

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Amazon ending its partnership with Catamaran comes as the e-commerce sector in country is struggling with stricter ground rules set by the government in June that will regulate flash sales offered by the companies and also rein online marketplaces that manipulate search options to promote certain sellers. 

Amit Agarwal, global senior VP and country head Amazon India said, “Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally. We are humbled by how the JV exceeded its vision, helping online commerce evolve through the unrelenting efforts of hundreds of its employees, positively impacting over 4.3 million small businesses, creating hundreds of thousands of jobs, and contributing to India’s digital economy.”

Last year the Competition Commission of India (CCI), India’s antitrust watchdog, had ordered a probe into Amazon and Flipkart acting on complaint launched by Delhi Vyapar Mahasangh. The two companies moved Supreme Court and denied any wrongdoing.