Thousands of lost products have been resurrected on Amazon’s Indian marketplace after the online goliath sold its stake in a profitable local venture.
India’s stringent new e-commerce laws have taken a toll on both Amazon.in and Walmart-owned Flipkart since the legislation changes came into effect on February 1, 2019. In a last-ditch effort to retain its standing as one of the region’s leading marketplaces, Amazon has sold its shares in Cloudtail in a hasty deal.
Shortly after selling its stake in the wholesale group, thousands of suspended listings from Cloudtail were reactivated on Amazon’s local site. The US-based business reportedly sold its 25 percent stake to Prione Business Services Pvt, which is run by billionaire Narayana Murthy’s Catamaran Advisors LLP. Prione now has a 76 percent stake in the local venture. According to inside sources, the exchange of these shares means both Amazon and Cloudtail are compliant with India’s new laws.
In a statement, Catamaran’s CEO Abishek Laxminarayan said “Catamaran has always been 100 percent compliant” with Indian laws. “On February 6, 2019, Catamaran has affected the required changes to be 100 percent compliant with the new regulations,” he said.
While the return of Cloudtail to Amazon has reduced the impact of lost products and sellers on the marketplace, thousands of third-party product listings are still absent from the company’s virtual shelves. Amazon, which together with Flipkart accounts for 70 percent of India’s online retail market, can also expect to see a drop in revenue in the coming months. Consultancy firm, Technopak Advisors Pvt estimates the business’s revenue growth could drop from its forecast of 25 to 30 percent to as little as 15 percent.
Walmart and Amazon’s presence in the Indian market have caused unrest in the local retail industry, as before the explosion of e-commerce in the region, 90 percent of the country’s retail market was dominated by small sellers and family-run businesses. The government’s decision to curtail international marketplaces’ control in the region comes months ahead of a crucial general election, with the ruling party seeking support from small traders.