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The Silicon Review Asia

Cloudtail’s growth becomes almost stagnant as Amazon turns to other seller entities

Cloudtail’s growth becomes almost stagnant as Amazon turns to other seller entities

Cloudtail, the joint venture between Amazon and Cataraman Ventures, sees a 30% growth in its revenue at Rs 7,149 crore for FY18, as mentioned by the latest regulatory filings. After reporting a 300% growth in revenue in the financial year ended March 2016, Cloudtail’s revenues slowed down to less than 30% after Amazon made a move to focus on other sellers beyond Cloudtail.It also had to go through a loss of Rs 4 crore compared to anRs 1.5 crore profit in the previous year after its expenses increased to 27% during FY18.

Last year, Amazon created another seller entity, Appario, and it focused on many other big sellers in order to ensure adequate inventory and faster shipping after the order is placed through its platform. This move also denotes its compliance with the foreign direct investment rules. The rules, announced in March 2016, have compelled large e-commerce firms in India to change their legal structures and allowed foreign direct investment in online marketplaces while capping the contribution of a single seller to 25% of the marketplace’s overall business.

Moving further, Cloudtail used to get an income from participating in promotional schemes issued by Amazon, but that has now fallen to nil from over Rs 100 crore. In 2015, Cloudtail had a significant growth from the Amazon India’s electronics and fashion categories. Though these were the largest categories for Amazon, the company now generates a majority of sales from smartphone sales.

In 2017, Amazon India’s marketplace arm, Amazon Seller Services, almost multiplied its development and revenue toRs 3,129 crore in contrast to Rs 2,217 crore the year before.

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