Amazon-Patni JV Seller Appario Retail Receives $15.69 Mn Capital Infusion

Appario Retail, the seller entity under the recently formed joint venture between Amazon and Patni Group, has received a capital infusion of $15.69 Mn (INR 100 Cr).

As per latest filings with the Registrar of Companies (RoC), Appario Retail has increased its paid up capital to $22 Mn (INR140 Cr) from $6.27 Mn (INR 40 Cr).

Amazon had formed a JV (joint venture) with Ashok Patni Group to strengthen its customer service unit or call centre in September this year. The step was aimed at elevating its brand presence amidst Indian customers by supporting the growing number of local-language customers.

Patni Group holds 51% ownership in the JV, and also helped Amazon in setting up a subsidiary Frontizo Business Services, that acts as a seller on the Amazon India platform. Frontizo Business Services started operations in Bengaluru In June this year with an investment of $30.4 Mn (INR 197 Cr) from Amazon Asia Pacific Holdings and Patni’s Zodiac Wealth Advisors LLP, according to Ministry of Corporate Affairs (MCA) filings.

Appario Retail is the wholly owned subsidiary of Frontizo Business. Prior to this, Appario had received about $6.27 Mn (INR 40 Cr) in capital.

Frontizo is much like Amazon’s similar JV which was formed three years ago between Amazon and Infosys founder N R Narayana Murthy’s family office Catamaran Ventures Cloudtail India. Amazon has been trying to reduce its dependence on Cloudtail ever since the Indian government put forth new DIPP guidelines last year which said that a single seller should not clock more than 25% of overall sales for an ecommerce player.

The new guidelines apparently also led to a slowdown in growth of Cloudtail this year. In order to adhere to these guidelines, Cloudtail stopped the sale of mobile phones via Amazon India platform in September 2016. Mobile phones contributed towards a significant portion of Cloudtail’s revenues.

Fast-selling brands such as Samsung and Apple were then sold by newer sellers who get priority display at Amazon as compared to Cloudtail. Consequently, Cloudtail posted a 24% jump in its revenue for FY17, showcasing a net revenue of $883.1 Mn (INR 5,688.7 Cr) as compared to the 300% surge to $712 Mn (INR 4,586.9 Cr) the vendor reported in FY16.

With Frontizo, the existing and future consumers at Amazon can benefit with multi-channel customer support services, including email assistance, customer outreach and contact on the phone. Thus the ecommerce major’s intention is to ramp up Appario Retail, the JV with Patni similarly like Cloudtail, which emerged as the largest seller on Amazon India. How quickly it is able to do remains to be seen.

[The development was reported by TOI]