E-Commerce behemoth Amazon is forming an e-commerce joint venture with Catamaran Ventures, the investment office of Infosys co-founder NR Narayana Murthy for back end operations, reports The Economic Times.
Catamaran Ventures head Arjun Narayanswamy has told the publication that they are partnering with Amazon Asia to offer services that will help offline sellers and SMBs (Small and Medium Businesses) sell their products online.
Catamaran Ventures will hold 51% stake in the holding company which will be an Indian entity. A subsidiary of this company which will also be an Indian company, will reportedly roll out the e-commerce business. While there aren’t any specific details on this business yet, it looks like this will probably be something similar to what Shopify offers in the country.
This joint venture is reportedly being done to work around the existing FDI regulations in e-commerce. Remember that FDI is currently banned in B2C e-commerce format, while the government allows 100% FDI in B2B e-commerce ventures. However, there has been reports which suggests that the government is looking to allow FDI in B2C e-commerce format from next month.
It’s worth noting that Amazon has been continuously engaging with the Indian government to relax the regulations against foreign e-commerce companies and allow foreign direct investment in online retail, ever since it launched an e-commerce marketplace in India last June.
Last November, Amazon director and general manager (seller services) Amit Deshpande had mentioned that the relaxation of FDI norms will allow them to adopt a US-like hybrid model wherein Amazon will start retailing products along with the existing marketplace. This is because marketplace accounts for only around 40% of their business in the US.
Back in February 2012, Amazon had also received government approval to set up its logistics service in India, following which it had launched its third-party logistics service in November last year starting with a pilot in Delhi-NCR region. The company had also introduced assisted shipping in April this year, that let sellers ship products from their own warehouses using Amazon’s logistics service.
What about Yebhi?
It’s worth noting that Catamaran Ventures is also an investor in the online fashion and lifestyle portal Yebhi, although it hadn’t nominated anyone to the Yebhi board.
The company also seems to be struggling off late, with two of the co-founders Nitin Agarwal and Rahul Jain quitting Yebhi earlier this year. The company was also undergoing a cost restructuring which had led to employee layoffs.
Yebhi had also dropped plans to raise any further investment in a bid to “create profitability first and break-even”. Earlier, the company was looking to raise $30 million, although two of its existing investors Fidelity and Nexus Venture Partners were not expected to lead the round.