Our Bureau/Agencies Amazon.com 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.
With the transaction, Cloudtail resumed selling products as of midnight, people familiar with the matter said.
Cloudtail India is a joint venture between Amazon and NR Narayana Murthy's family office, Catamaran Ventures. Amazon has sold 25 per cent of its shares to Prione Business Services Pvt, a company run by Catamaran Advisors. Prione now owns 76 per cent of the venture from 51 per cent previously, the sources said. The remaining 24 per cent is now owned by a non-Indian arm of the US retailer, called Amazon Asia-Pacific Resources Ltd, they added.
Catamaran Ventures, the logistics partner of Amazon India, said that the latter has made the required changes to comply with the changed foreign investment rules in online marketplaces. CEO Abishek Laxminarayan confirmed this is a statement.
After the new norms for foreign investment rules in online marketplaces kicked in on February 1, Amazon-owned order fulfilment companies such as Cloudtail stopped operations, which resulted in sellers leaving the platform. In a letter, Laxminarayan said that on February 6, Catamaran had made the required changes to be compliant with Press Note 2.
The recent norms have prohibited vendors with equity held by the marketplace or group companies from selling on the platform, affecting Cloudtail and Appario, two Amazon-owned companies.
Post the directive, Amazon India was forced to remove a large number of items sold by vendors such as Cloudtail and Appario as it indirectly held 49 per cent equity stakes in both firms.
Reacting to this, Amazon cut its indirect holding in Cloudtail to 24 per cent.
“Catamaran has always been 100 per cent compliant with every law of our country. We will continue to do so in the future,” said Laxminarayan.
Walmart-owned Flipkart has been less impacted as it had no equity stake in its vendors.