Services of Cloudtail, which is amongst the biggest sellers on Amazon India, are to stop. The employees of Cloudtail, about 450 in India, will be absorbed by Amazon. The inventory of Cloudtail is already being transferred to other sellers.
While its healthcare and personal care inventory is being moved to Rocket Kommerce, its electronics inventory is being moved to VRP Telematics, as reported by ET. The fashion, apparel and accessories inventory of Cloudtail will be transferred to Cocoblu Retail, an e-commerce business that came into existence less than six months ago.
After FDI rules pertaining to e-commerce became tighter, Amazon India has been working on being less dependent on Cloudtail, which was allowing it to cater to most of its consumer orders on time. It was enabling online business for over three lakh sellers and traders and also facilitate digital payment for about four million.
However, the regulations in India do not allow online marketplaces to own any direct stake in the companies of the sellers. These rules have reportedly not met the approval of foreign retailers selling goods online, which seem to be rather restrictive for the industry.
Amazon will fully take over Cloudtail, which was established as a joint venture between Amazon India and Catamaran Ventures, which is the family investment office of NR Narayana Murthy, founder, Infosys. The contract between the two parties was anyway about to expire in May, 2022, and will now not be renewed.