TNN(This story originally appeared in 
on Aug 11, 2019)
BENGALURU: Amazon India has made a slew of changes in the seller mix on the platform, reducing dependence on vendors in which it owns a stake — like Cloudtail and Appario — after the updated online marketplace policy was announced in December. The e-tailer is now focusing on around a dozen midsized, third-party sellers who drive 30-33% of its total sales in India, up from about 20% earlier, according to two sources familiar with the development. on Aug 11, 2019)Similar to its platinum seller programme, which ran into problems due to GST in 2017, these sellers on Amazon India include Green Mobile, Rocket Kommerce, Primarc and Redlily, sources aware of the goings-on said. “Cloudtail is doing about 24% of sales, while Appario is under 20%. Small merchants would do about 20-25% of sales on its marketplace here. This is where the 30% chunk becomes critical for the e-tailer,” a person aware of the changes said.
Cloudtail and Appario were earlier doing more than 50% of the sales on Amazon India.
This comes as the Seattle headquartered Amazon has set an aggressive target of clocking $15-16 billion in gross sales for calendar 2020 in India, according to these sources. The e-tailing giant is said to have clocked about $7 billion in gross sales in 2018.
The clarifications in the policy in February barred etailers from holding stake in seller entities and an earlier note mandated them to maintain a maximum limit of 25% of total sales coming from one seller — Amazon has been working on these changes to adapt under the new regime. It has reduced ownership in sellers like Cloudtail to 24% from 49%.
According to one of the sources, unlike in the US, the transition of small sellers independently moving large volumes while maintaining good shopping experience is yet to happen in India and that is why Amazon wants to rely on a few large merchants. “So, it becomes important for them to indirectly have this group of sellers, who would have Rs 20-30 crore of capital to invest,” this person added.
The overall volume of sales by these sellers has gone up in the range of 6-10% in the recent past as Amazon-backed sellers have tried to curtail their volumes to comply with FDI rules. To be sure, there is no official programme or plan that has been designed by Amazon for the earlier mentioned sellers.
The local arm of the Seattle-based e-tailer has also stopped paying a ‘loyalty bonus’ to brands who were exclusively selling on Amazon India. New FDI regulations do not allow an e-tailer to ask brands to sell exclusively on one platform.
These changes are being more rigorously implemented by Amazon after the heated debate that occurred during a meeting with commerce minister Piyush Goyal and e-tailers in June. The government had told foreign e-tailers like Amazon and Walmart-owned Flipkart to comply with new laws in spirit, an area where domestic e-tailers had complained against foreign e-tailers, accusing them of circumventing policy loopholes.
Amazon did not reply to specific queries sent by TOI.
