Amazon Cuts India Deal to Return Products to Website

 

    The e-commerce giant inked pact to comply with new regulations

    The rules have upended Amazon’s and Walmart’s India plans

 

By Saritha Rai, Bloomberg 

February 7, 2019

 

Amazon.com Inc. resurrected thousands of suspended product listings in India by selling much of its stake in top local venture partner Cloudtail, a hastily arranged deal intended to comply with stringent new e-commerce regulations that upended the market.

 

With the transaction, Cloudtail resumed selling products as of midnight, people familiar with the matter said. The Amazon entity sold 25 percent of its shares to Prione Business Services Pvt, a company run by billionaire Narayana Murthy’s Catamaran Advisors LLP. Prione now owns 76 percent of the venture from 51 percent previously, they said. The remaining 24 percent is now owned by a non-Indian arm of the U.S. retailer’s called Amazon Asia-Pacific Resources Ltd, they said, asking not to be identified talking about a private matter.

 

The deal allowed Amazon to recover a big chunk of item listings frozen since Feb. 1, when newly introduced e-commerce regulations threw Amazon’s and Walmart Inc.’s plans for the world’s fastest-growing online retail arena into disarray. Heeding complaints from small merchants, Narendra Modi’s government banned Amazon and Walmart’s Flipkart from cutting exclusive arrangements with sellers, offering deep discounts or holding any business interest in online merchants on their websites.

 

Amazon’s deal with Catamaran’s Prione complies with that latter rule, the people said, as Amazon’s Indian entity, the marketplace called Amazon Seller Services Pvt, has no direct relation to Prione whose stake is held by a Singapore-based Amazon entity.

 

“Catamaran has always been 100% compliant with every law of our country, India. We will continue to do so in the future,” Catamaran CEO Abishek Laxminarayan said in a statement on Thursday. “On February 6, 2019, Catamaran has effected the required changes to be 100% compliant with” the new regulations.

 

Despite Cloudtail’s return to Amazon.in, thousands of products remain missing from the virtual shelves of Amazon and Flipkart, which together account for 70 percent of India’s online retail market. Arvind Singhal of consultancy Technopak Advisors Pvt, has estimated their revenue growth could fall to 15 percent in coming months from 25 percent to 30 percent previously.

 

Lawyers representing Amazon and Walmart have been toiling without pause to stitch together new deals. Meanwhile, Amazon is working out a similar process with its other large seller...

 

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https://www.bloomberg.com/news/articles/2019-02-07/amazon-is-said-to-cut-india-deal-to-return-products-to-website