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Amazon fights new FDI norms, in talks to bring on board sellers like Cloudtail & Appario

by Apparel Resources News-Desk

08-February-2019  |  2 mins read

Amazon
Image Courtesy: news4europe.eu

On compliance of the revised FDI norms for e-commerce, Amazon India has announced that it does not own any equity share in the seller companies. The online major is in talks with a select set of sellers on its platform to offer them benefits such as low commission rates and other incentives, at par with what is given to its preferred sellers Cloudtail and Appario.

The latest FDI rules prohibit e-commerce companies from owning equity stakes in seller companies and also bars them from making exclusive deals with the sellers.

Following the government’s direction, Cloudtail and Appario which had paused its service after FDI e-commerce rule came into effect on February 1, is reportedly making a comeback after restructuring its ownership so that it is no longer a group company of the marketplace.

“Amazon is starting a new program wherein normal sellers will be given the opportunity that Cloudtail and Appario are getting now. But it will come out with certain conditions,” said a source aware of the matter.

Amazon inditrectly held 49 percent equity stakes in both Cloudtail and Appario which led the firm to remove products sold by these sellers, in compliance with teh new FDI policy. On Thursday Cloudtail had returned with more than 3,00,000 products listed on Amazon, after the US e-commerce major cut its indirect holding to 24 percent, said one of the sources with knowledge of the matter. The stake was bought by the majority holders, Catamaran Ventures.

Another source said that Amazon is making working on another such restructuring for its other major seller, Appario.

Meanwhile, the Confederation of All India Traders (CAIT) alleged that Amazon’s latest move was a circumvention of the new rules.