Amazon to end partnership with Cloudtail, one of the top sellers on its Indian platform

Amazon and Cloudtail, which is controlled by India's Catamaran, were originally scheduled to renew their cooperation agreement on May 19, 2022, but the two parties said in a recent joint statement that they would not renew the contract.

The joint statement from the two companies did not explain why they were ending their partnership, but highlighted that their successful cooperation had lasted for seven years and that great progress had been made during that period.

It is understood that Cloudtail was established after Amazon cooperated with India's famous technology tycoon NR Narayana Murthy, and started selling products on Amazon.in in August 2014.

Cloudtail has a long history of controversy, with Indian brick-and-mortar retailers accusing Amazon of giving it preferential treatment at the expense of other smaller retailers for years.

The editor also learned from a previous Reuters investigation that Amazon has provided preferential treatment to a small group of sellers, including Cloudtail, for many years and used these sellers to circumvent Indian laws.

Amazon said it does not provide preferential treatment to any seller and has always complied with laws and regulations.

Amazon publicly described Cloudtail as an independent seller offering goods on its website, according to a Reuters investigation . But internal company documents show that Amazon helped Cloudtail grow and expand, and used it and other sellers to circumvent Indian laws against foreign investors.

The report has sparked calls for an injunction and investigations into Amazon, with both financial crime fighters and antitrust watchdogs conducting related probes.

Arvind Singhal, chairman of retail consultancy Technopak Advisors, said the decisions by Amazon and Catamaran appear to be in response to upcoming scrutiny of their business models.

Singhal added: “They are trying to distance themselves from the relationship before it gets more scrutiny. But the partnership has been in place for years and it remains a threat to them.”

The editor learned that Amazon also offered discounted fees to another seller called Appario. Amazon is also negotiating with Appario's parent company to determine whether to renew its cooperation next year.

It is reported that the Supreme Court of India ruled on Monday that Amazon and Walmart's Flipkart will be subject to India's antitrust investigation against them, which has dealt a blow to the development of the two companies in India to some extent.

As we all know, India is an important investment market for Amazon, which has previously pledged to invest $6.5 billion in India. But Amazon is also facing some regulatory crises, including India's stricter laws against foreign e-commerce giants. Is this ultimately an opportunity or a crisis? Let's see how the giants respond.

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