Bad News By Amazon Amazon India is going to discontinue the services of its top seller Cloudtail within the next month, as India’s regulatory watchdog FDI approves the Amazon’s bid to fully acquire Catamaran’s parent company Prione Business Services which will end the contract between the American company and Infosys founder NR Narayana Murthy’s investment office. The contract was to expire by May 19, 2022 but Cloudtail is likely to shut down sooner, according to sources.
Prione and Amazon’s stake in Catamaran
Catamaran owns 76% in Prione and the rest is owned by Amazon. Earlier, the Jeff Bezos-owned company held 49% but the e-commerce giant was forced to trim its stake in the year 2019 to 24% to be in compliance with the new foreign direct investment (FDI) regulations for ecommerce.
The price at which Catamaran is selling its stake to Amazon could not be determined immediately.
Amazon is probably not going to set up another joint venture to have a seller similar to Cloudtail, those aware of the thinking within the American company said.
Prione’s existing business of onboarding sellers to the Amazon India marketplace through its fleet on-street team is going to continue normally, sources said.
Cloudtail is Amazon India’s largest seller
The current inventory held by Cloudtail which is one of the largest sellers on Amazon India will need to be distributed to other vendors and sellers. This exercise is likely to begin when the Amazon Catamaran transaction closing is near, according to people aware of plans.
Amazon India has been trying to reduce its own dependency on Cloudtail after the FDI rules tightened in ecommerce but it still remains one of Amazon’s largest sellers. Cloudtail’s closure is likely to have a huge impact, given its crucial role in allowing Amazon India to service a bulk of consumer orders in a speedy manner.
What will happen to Cloudtail’s employees?
Cloudtail’s current has approximately 1,200 employees, and they are going to be treated as Amazon’s employees once the transaction closes. “Cloudtail and Prione will be Amazon’s assets and liabilities,” sources said. However, it is not yet confirmed if Amazon is going to take in all the staff.
