Post FDI In Ecommerce Guidelines, Amazon India’s Global Store Shrinks

In another aftereffect of the foreign direct investment in the ecommerce policy, Amazon’s Global Store is reportedly losing its virtual presence in India after it witnessed a sharp fall in the items listed on the platform.

The global store was launched in by Amazon India in 2016 after which allowed the users to buy products directly from the Amazon US website. It offered products from brands which were not available in India. The products purchased from the global store were also equipped with local customer care services and delivery.

According to a TOI report, only 6,000 products main global store entity Amazon Exports Sales LLC was available in last month as compared to 6 Mn products before February.

Following the implementation of the FDI in ecommerce guidelines on February 1, ecommerce marketplaces were barred from selling products from companies where they own a stake. The rule also directed that marketplaces will not mandate a seller to sell products exclusively on its platform.

The new rules also prohibit marketplaces from making more than 25% of purchases of a vendor.

In order to comply with guidelines, Amazon Asia reduced its stake in Cloudtail to 24% from the earlier 49%.

In February, Amazon India had also removed all the product listings from its preferred sellers such as Cloudtail and Appario Retail in India.

It also reduced its commission charges to attract more independent sellers and show itself as a friendly marketplace. The commissions have been lowered by 35% for famous fashion sellers and by over 50% on specific FMCG categories.

With the new ecommerce FDI rules applied from February 1, Amazon and Walmart’s have together lost $50 Bn in market capitalisation.

Amazon experienced a fall in its shares by 5.38% at the start of February losing $45.22 Bn in market capitalisation.

While it was earlier reported that Amazon has suspended its plans to acquire stake in Kishore Biyani’s Future Group,  the ecommerce market player is, however, looking to get a stake in Future Coupons, a coupon provider owned by Future Group.

Amazon is also reconsidering its deal to buy stake in Aditya Birla’s More chain of grocery supermarkets.

Not only Amazon but US-based retail giant Walmart which had acquired ecommerce giant Flipkart last year had also expressed its concerns over the FDI guidelines. During an investor call, Walmart chief executive officer Doug McMillon said that they were disappointed over the guidelines and also said that they expect a more collaborative regulatory process in future.