A joint statement by the two companies came hours after the Supreme Court said that e-commerce majors Amazon and Flipkart should volunteer for antitrust investigation into their business practices.
Cloudtail India, a top seller on Amazon’s marketplace, is going to stop operations from May 2022. This follows Amazon and NR Narayana Murthy-owned Catamaran Ventures on Monday deciding to discontinue their partnership after a successful run of seven years. A joint statement by the two companies came hours after the Supreme Court said that e-commerce majors Amazon and Flipkart should volunteer for antitrust investigation into their business practices.
Amazon and Catamaran jointly operate Prione Business Services. Cloudtail India is a wholly-owned subsidiary of Prione Business Services. “Prione Business Services, the joint venture between Amazon and Catamaran, has been running successfully for the past seven years and comes up for renewal on May 19, 2022. The two partners today (Monday) announced they have mutually decided to not continue their joint venture beyond the end of its current term,” the two companies said.
E-commerce companies Amazon and Walmart-controlled Flipkart have come under heavy scrutiny by Indian authorities over repeated claims of flouting government-mandated sectoral FDI norms by the country’s local traders who run brick-and-mortar shops. Organisations like the Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh (DVM) have been seeking probe into their anti-competitive business practices that entail deep discounting, predatory pricing and preferential listing of sellers.
While the government is already working on an e-commerce policy, the consumer affairs ministry has also separately issued new draft e-commerce rules that seeks to tighten restrictions on online businesses. In 2019, the government’s revised FDI norms in e-commerce came into effect that barred online firms having foreign investment like Flipkart and Amazon from selling products of the entities in which they hold stake or whose inventory they control.
“Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally. We are humbled by how the JV exceeded its vision, helping online commerce evolve through the unrelenting efforts of hundreds of its employees, positively impacting over 4.3 million small businesses, creating hundreds of thousands of jobs, and contributing to India’s digital economy,” said Amit Agarwal, global senior VP and country head at Amazon India.
The JV enabled hundreds of thousands of sellers to sell online and provide a wide selection of products for Indian customers. The JV also supported the growth of programmes like Karigar and Saheli, Amazon said.