These sellers have also had operational challenges.Īs per current conversations, Appario will become a wholesale like entity and may also offer services like Prione does to ecommerce sellers.
“These new sellers do not have a big balance sheet, so it is better that Appario remains the buyer.”ĮT reported on July 8, 2022, that sales on Amazon fell significantly as brands found it difficult to extend credit lines to the new sellers as they lacked transaction and credit history. “From a brand point of view, nothing changes,” said a source. This is to ensure that brands will continue to have a smooth relationship with the ecommerce marketplace as sellers dealing with them would require a significant amount of capital to be invested in the business. Multiple sources added that Appario, once it ceases to exist as a seller, is likely to become a business-to-business (B2B) unit facilitating sale of goods between a new set of large sellers on Amazon and smaller third-party sellers. In late 2022, the American online retail giant had to shut down several businesses including its edtech business, food delivery unit and a grocery wholesaler arm in India.Īmazon India country manager Manish Tiwary in an interaction with ET in December last year said that the company is bullish about the country and that the Seattle-based firm is not shutting down businesses but just closing some of its experiments. Amazon’s India business was mentioned as “decidedly mixed” in the report. Amazon faces an “unfavourable regulatory environment” compared to its domestic rivals, the report said. The latest developments mean the curtain will eventually fall on Appario this year, although the two companies have not specified an exact date.Īppario Retail had revenue of over Rs 15,000 crore in FY22 along with a profit of Rs 82 crore.Ī report from Bernstein Research had said last year in September that the biggest challenge for Amazon in India has been regulatory headwinds. This is a key factor for consumers when they shop online. It will also impact overall margins for Amazon India., he added.Īs was the case with Cloudtail and Appario, the newer sellers also offer faster shipping services. “They (Amazon) have built a reputation around customer experience performance which they need to protect, irrespective of the mode in which their seller partners operate from behind the scenes,” said Ashutosh Sharma, VP, research director, Forrester–a market research firm. The government had red flagged proximity between sellers and ecommerce marketplaces, after small traders alleged that ecommerce companies were promoting their preferred sellers on the platforms.Įmails sent to Amazon India, Appario Retail, Dawntech and Clicktech did not elicit any response till press time Tuesday.įrontizo offers customer care services to Amazon India, which is expected to continue.Įxperts are of the view that these changes will impact Amazon’s control over the quality of product, returns, and overall experience of the customers. Indian regulations do not permit a foreign-owned entity running an online marketplace and its group companies to own stakes in any seller on the platform, or to have control over their inventory. Catamaran Ventures is the investment arm of Infosys founder N R Narayana Murthy. This led to Cloudtail having to withdraw from Amazon India. In 2019, Amazon had reduced its stake in Cloudtail parent Prione to 24% but then last year acquired 100% by buying out Catamaran Ventures’ stake in it. This would be the second time a major seller firm–where Amazon held a stake–is having to stop operations in the face of regulatory changes here. In its first year of operation in FY22 it recorded a revenue of Rs 10 crore. It received a Rs 350 crore fund infusion by the promoters in January. Cocoblu Retail is a newly floated ecommerce seller incorporated last October and is a wholly owned subsidiary of Delhi-based Rattan India Enterprise. Dawntech is part of Bengaluru’s leading real estate firm Salarpuria-Sattva Group.
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