Your browser is currently blocking notification.
Please follow this instruction to subscribe:
X
Notifications are already enabled.
X

Amazon’s Largest Seller Cloudtail Sees 25% Revenue Growth

Amazon’s Largest Seller Cloudtail Sees 25% Revenue Growth

Cloudtail's growth is despite running into regulatory hurdles that resulted in some downtime in the January quarter

The company is a joint venture of Amazon and NR Narayana Murthy’s Catamaran Ventures

Cloudtail’s expenses went up by 27% to INR 8,899 Cr during the previous financial year

Cloudtail India reported a revenue growth of 25% to INR 8,945 Cr in the year ended March 2019, the Amazon affiliated company announced. Cloudtail is the single largest seller on Amazon’s India marketplace. However, the revenue growth at Cloudtail comes even though seller ran into regulatory issues that resulted in some downtime in January and February. It is owned by Prione Business Services, a joint venture between Amazon India and Infosys founder NR Narayana Murthy’s Catamaran Ventures.

The company had reported a loss of INR 4.11 Cr in FY18 and a profit of INR 1.6 Cr in FY17. Cloudtail reported a profit of INR 29.4 Cr in 2018-19.

The filings also said that Cloudtail’s expenses went up by 27% to INR 8,899 Cr during the previous financial year, even as its revenue grew. Majority of those expenses (INR 8,537 Cr) went into purchasing stock or inventory. The Cloudtail revenue growth comes in in spite of company witnessing a major change in ownership of its holding company to comply with foreign direct investment regulations, which affected Amazon’s India business gravely.

In February this year, Catamaran Ventures had increased its stake in Cloudtail’s parent company to 76% from 51% earlier. This reduced JV partner Amazon Asia’s stake to 24% from 49% after the implementation of Press Note 2. Cloudtail thus was not an Amazon group company anymore and became eligible to sell on the marketplace.

It was reported that thousands of products remained missing from the virtual shelves of Amazon and Flipkart, which together accounted for 70% of India’s online retail market. Amazon, however, said in the following earnings call that the impact from the changes were minimal, even though both Walmart and Amazon lost close to $50 Bn in market cap following the changes.

Cloudtail was now reportedly onboarding independent sellers to trade imported food products that ARIPL had prohibited from selling. Government norms only permit the selling of local and packed food items on both offline and online retail channels. The government had emphasised on following the new rules.

Commerce minister Piyush Goyal had also said that these rules should in no way be violated by any company, both in letter and in spirit. He added that the government would not allow ecommerce discounting practices from affecting small shopkeepers.

Amazon India only invested INR 2,800 Cr this year, compared to INR 9,450 Cr in 2018. The reports have also cited analysts stating that the last year’s spike in investment might be due to Amazon’s venture into the grocery business and for the supply chain needed for the same.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

Author

Shanthi S

Inc42 Staff
Journalist

Shanthi has 13 years of experience in journalism, both print and digital media. She specialises in writing long format feature stories. Trends, interviews and human-interest stories are her forte. You can write to her at [email protected]

Responses
https://inc42.com/buzz/future-retail-to-buy-future-groups-retail-infra-assets-as-biyani-aims-to-cut-costs/
Loading Next…

Upcoming Events