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Amazon’s JV Appario Retail Clocks In $104.4 Mn For FY18

Amazon’s JV Appario Retail Clocks In $104.4 Mn For FY18

Appario Retail is a joint venture between Amazon and the Patni group

Appario is primarily engaged in trading activities on ecommerce website

A group of sellers may file a case against Amazon alleging “preferential treatment” to larger sellers such as Cloudtail and Appario

sellers and authorities alike, another big seller for the global ecommerce giant, Appario Retail, a joint venture between Amazon and the Patni group, registered a total income of $104.44 Mn (INR 759 Cr) in financial year 2017-18.

In its first year of operation, the Amazon seller has reportedly recorded the total expenditure of $105.51 Mn (INR 767 Cr), with the loss after tax standing at $963.3K (INR 7 Cr).

The regulatory filings show that the company started its business during the year ended March 31, 2018 and is “primarily engaged in trading activities on ecommerce website”

Frontizo, Appario’s holding company, was formed as a joint venture where Patni group holds majority stake of 51% with Amazon Asia Pacific Holdings holding 48%. The company started with $27.1 Mn investment in Bengaluru and saw subsequent capital infusions.

Fronizo’s documents state that it is “primarily engaged in providing IT enabled support services and trading activities on e-commerce website,”

The company acquired the equity shares of Appario on August 8, 2017, “for a sum of $1375 (INR 0.1 Mn) and infused additional capital in Appario,” thereby Appario became the wholly owned subsidiary of the Company.

The consolidated income for Frontizo was $106.06 Mn (INR 771 Cr), with a loss of $1.65 Mn (INR 12 Cr), the filings show.

The development comes in line with regulatory requirements capping a maximum sale of 25% for one seller. Therefore, Amazon has been looking to tap various sellers for its ecommerce platform.

Amazon India has reportedly reduced both its storage charges as well as seller fee in five categories in order to encourage vendors to stock more products ahead of its festive season sale in October this year.

Here’s a quick update on Amazon sellers and fees:

  • Amazon has slashed the commission it charges sellers by 2% in popular categories such as apparel, home, and electronic accessories
  • It also reduced the rates of its Go Local programme by at least 20%, which will enable sellers to bring their inventories closer to their customers by improving their delivery speed
  • Amazon India has been witnessing an addition of 3,000 sellers every week
  • A group of sellers is reportedly in the process of filing a case against the company alleging that it gives “preferential treatment” to larger sellers such as Cloudtail and Appario
  • In June 2018, it reduced its seller fees in categories such as furniture and luggage
  • In April 2018, the company reduced the seller fees by 70% in categories such as daily needs and apparel, while it was increased by up to 50% for items like power banks, chargers, shoes etc

The month of October usually marks the beginning of the festive season in India. Not only Amazon India, but it’s arch-rival Flipkart is also gearing up for its annual festive sale — Big Billion Days — which is scheduled to begin on October 10.

With huge targets set for the season sale along with major marketing and advertising programme already in place, Indian ecommerce war is ready for the showdown.

[The development was reported by ET.]