Cloudtail India Pvt. Ltd., a 49:51 joint venture between Amazon.com Inc. and Infosys Founder N.R. Narayana Murthy’s Catamaran Ventures, has become the largest seller on Amazon India platform, contributing at least 40% of the company sales. It has been operational since August 2014 and dominant in electronics and fashion sales, which are the largest categories for the Amazon India.
Talking about the ways how Cloudtail has become the biggest platform, one of the Amazon’s executives told ET that it is only through additional discounts on the goods sold. Footwear and fashion merchandise which sold through Cloudtail comes with more discounts than the same products sold by other sellers on the site. The sellers sell their goods through Cloudtail as it helps their sales because in any case the discounts get compensated by Amazon, as per the executive.
After Cloudtail’s aggressive expansion, Amazon has stopped giving guaranteed returns to some of its sellers on their goods and saved tens of crores of rupees. Earlier, the company had also announced its plans of a monthly return of 1-3% on the value of goods sent by some sellers to its warehouses. With this initiative, the firm got a significant product commitments from sellers as well as helped it in delivering goods faster than rivals, which is a differentiator factor of the Amazon in a market where it is desperate to succeed.
WS Retail is also a significant entity in this segment, which is owned and operated by Amazon’s Indian rival Flipkart. WS Retail has been operational for the last three years and accounting for 85% of the total products sold on the Flipkart’s platform.
WS Retail was founded in 2010 by Flipkart’s Founders to comply with the FDI rules. When Indian regulatory agencies investigated Flipkart’s business relationship with WS Retail, at that time both Bansals were forced to sell their stake in WS Retail to former OnMobile Global Ltd chief operating officer Rajeev Kuchhal. Two of Flipkart’s early employees, Sujeet Kumar and Tapas Rudrapatna currently hold 46% of the WS Retail. Sujeet oversees the logistics arm, ekart, and Tapas oversees the sourcing operations.
Several questions have been raised regarding Flipkart’s preference of WS Retail. However, the company is aiming to add more than triple the number of its third-party sellers by the end of this year to reduce its dependence on WS Retail.
With Cloudtail becoming the largest retailer on Amazon, a significant question has emerged- if other sellers are being given a fair treatment?