Amazon initiates wholesale remodeling in accordance with new FDI rules
Category: #retail  By Pankaj Singh  Date: 2019-02-04
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Amazon initiates wholesale remodeling in accordance with new FDI rules

Retail behemoth Amazon is reportedly planning to convert two of its most prominent sellers – namely, Cloudtail and Appario, into wholesale entities capable of undertaking B2B transactions. Credible sources cite that Amazon’s latest move comes on the heels of the requirement to be compliant with the latest ecommerce FDI rules effective from the 1st of February 2019.

Post the conversion, Appario and Cloudtail, 49% stake of both of which is owned by Amazon, will be liable to undertake sales transactions with a battery of preferred third-party vendors that will take care of the final sales to consumers. The remaining 51% stake in Appario and Cloudtail is held by the Patni Group and Catamaran Ventures respectively.

People familiar with the knowledge of the matter claim that category managers at the marketplace currently are in the process of preferred seller identification for each channel. They plan to source products from Appario and Cloudtail, according to the executives of suppliers and brands who work with them.

For the record, Appario and Cloudtail went off Amazon.in, starting February 1, given that group companies are now forbidden from selling via the marketplace under the latest norms. However, both of them have been selling through Amazon’s B2B marketplace in India.

A prominent executive from Amazon is of the opinion that the company has still not given up on the notion of divesting stakes in Cloudtail and Appario in accordance with the revised norms, thereby enabling them to sell directly to consumers. Citing the executive’s statement, the legal teams have been finalizing the correct structure to ensure that the Indian operations are completely compliant with the new policy. However, the stake sale idea is still not on the execution radar, given that the wholesale trading route will be compliant with the FDI and the retail giant will continue to enjoy the value in these entities, the executive elaborated.

Neither Cloudtail nor Appario have so far responded to any queries. Taking a diplomatic approach, Amazon claimed that the company does not intend to comment on any subject on behalf of the sellers.



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Pankaj Singh

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Pankaj Singh

Pankaj Singh Develops content for Market Size Forecasters, Algosonline, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

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