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FDI in ecommerce: Developments at Amazon Pantry, Cloudtail and Flipkart

Amazon Retail India, instead of Cloudtail, to sell on Pantry

Amazon Retail India, Amazon’s food retail subsidiary, will remain the main seller of food and grocery products on Amazon Pantry, reports the Economic Times. This development comes after the government clarified that food retail companies with FDI can continue to sell via e-commerce, and remain outside the ambit of the new regulations. According to the report, a DIPP notification dated January 3 states that “There is no change in the FDI policy on food product retail trading, which permits 100% FDI under approval route, including through e-commerce, in respect of food products manufactured and/or produced in India.”

Amazon was earlier selling Pantry products via Cloudtail, the JV between Amazon and Catamaran Ventures. Pantry had suspended operations after the new regulation kicked in, but resumed operations within a week.

Amazon is now looking at third-party sellers like Sigma Online to supply to Amazon Pantry.

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Amazon no longer a 49% stake holder in Cloudtail

Amazon has changed the ownership structure of Cloudtail such that Amazon is no longer the owning company, reports the Economic Times. Catamaran Ventures has increased its stake in Cloudtail parent Prione Business Services from 51% to 76%, reducing Amazon Asia’s stake from 49% to 24%. With this, Cloudtail is no longer an Amazon group company and can legally sell on the platform, per the report. Cloudtail may also list on other marketplaces like Snapdeal, Indiamart, and others, although listing on Flipkart has been ruled out.

Amazon’s stake in Appario, which is a joint venture between Amazon and the Patni Group, will similarly be offloaded, ET’s sources said. The Patni Group and Amazon Asia Pacific Holdings own a 51% and 49% stake respectively, in Appario parent Frontizo.

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Flipkart looking to enlist offline mobile, FMCG retailers

Flipkart is in talks with offline retailers and distributors of Samsung, Xiaomi, and sellers of FMCG products to enrol them as sellers on Flipkart to keep sales intact while remaining in line with the new e-commerce regulations, reports the Economic Times. Flipkart is reportedly looking for sellers, with revenues of Rs 1000-2000 crore, who do not conduct large parts of their business online, to ensure that their sales remain under the 25% mark.

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