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‘Objectives fulfilled’: Amazon, Murthy’s Catamaran to end Cloudtail parent JV next year

The announcement after the supreme court rejected a plea by amazon and flipkart seeking a stay on a probe by the cci into their business practices, paving the way for the antitrust regulator to look into various allegations levelled by sellers on these platforms..

Amazon and Infosys founder NR Naryana Murthy-owned Catamaran Ventures have decided to discontinue their joint-venture partnership for Prione Business Services — the parent company of Cloudtail India, one of Amazon India’s biggest sellers.

“Prione Business Services Pvt. Ltd, the joint venture between Amazon and Catamaran, has been running successfully for the past 7 years and comes up for renewal on May 19, 2022. The two partners today announced they have mutually decided to not continue their joint venture beyond the end of its current term,” Amazon and Catamaran said in a joint statement.

The announcement came on Monday, hours after the Supreme Court rejected a plea by Amazon and Flipkart seeking a stay on a probe by the Competition Commission of India (CCI) into their business practices, paving the way for the antitrust regulator to look into various allegations levelled by traders and sellers on these platforms. For years, sellers on platforms like Amazon and Flipkart have been complaining the preferential treatment provided to certain large sellers on these marketplaces, particularly the ones that have a relationship with the platforms.

Responding to a specific query by The Indian Express on the reason of the decision, an Amazon India spokesperson said: “Both the partners believe that the primary business objectives of the JV have been fulfilled. Hence, the JV partners have decided to not renew the JV.” Further, when asked about the next course of action, the spokesperson said: “Catamaran and Amazon have mutually agreed to not renew the JV and partners will decide the next steps.”

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In addition to Cloudtail, Amazon also has a partnership with the Patni Group, through which it operates another major seller on its platform Appario Retail. In February 2019, following the industry department issuing the Press Note 2, asking online marketplaces with foreign investment to not have relationship with sellers on their platforms, Amazon had reduced its stake in Prione Business Services to 24 per cent from 49 per cent earlier. Catamaran’s stake in Prione then rose to 76 per cent from 51 per cent. At the same time, Amazon had also reduced its stake in the Appario Retail JV to 24 per cent.

“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,” Amit Agarwal, global senior VP and country head-Amazon India, said.

In June, the Consumer Affairs Ministry had announced draft amendments to the Consumer Protection (E-commerce) Rules, significantly tightening the rules for online marketplaces. Shortly after the announcement of the draft amendments, Commerce and Consumer Affairs Minister Piyush Goyal had reprimanded e-commerce firms for “forum shopping” to delay sharing information with the CCI. “A number of these large e-commerce companies have come into India and very blatantly flouted the laws of the land in more ways than one…I’ve had several engagements with these large companies, particularly the American ones, and I can see a little bit of arrogance,” he had said.

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• NR Narayana Murthy

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CCI approves Amazon’s acquisition of Catamaran’s stake in Cloudtail parent

Cloudtail was formed when amazon entered a joint venture with narayana murthy's prione business services, which began offering goods on amazon.in after it was set up in august 2014..

• Updated Mar 09, 2022, 9:35 PM IST

The Competition Commission of India (CCI) on Wednesday approved Amazon's acquisition of Catamaran Ventures' entire stake in Prione Business Services Pvt Ltd. Prione Business Services houses Cloudtail, one of Amazon.in's largest sellers.

The CCI, via a tweet, said, "Commission approves acquisition of Prione Business Services Private Limited by Amazon Asia-Pacific Resources Private Limited."

Commission approves acquisition of Prione Business Services Private Limited by Amazon Asia-Pacific Resources Private Limited pic.twitter.com/7QdZRFRhc5 — CCI (@CCI_India) March 9, 2022

Cloudtail was formed when Amazon entered a joint venture with an entity formed by one of India's most famous tech moguls, N.R. Narayana Murthy, which began offering goods on Amazon.in after it was set up in August 2014.

However, last year in August, a joint venture between Amazon and Catamaran that controlled Cloudtail was coming up for renewal on May 19, 2022, but the two sides said in a joint statement they had mutually decided not to extend it beyond that date.

Besides, Cloudtail had been controversial, with Indian brick-and-mortar retailers for years accusing Amazon of giving it preferential treatment which hurt smaller retailers.

Earlier in January this year, domestic traders' body CAIT had filed a petition before the anti-trust agency to block the transaction that has been entered into by Amazon where it will acquire 100 per cent shareholding in Cloudtail.

The petition provided evidence to show Cloudtail charges less fees/ commission and is a preferential seller on the platform, and with its 100 per cent acquisition, Amazon will cause an adverse effect on the market.

"CAIT has today filed a petition before the Competition Commission of India seeking to block the transaction which has been entered into by Amazon where they will acquire 100 per cent shareholding in Cloudtail," it had added.

Cloudtail, in which Amazon holds 24 per cent stake along with Murthy’s Catamaran Ventures (76 per cent), saw its net profit rise by 171 per cent year-on-year to Rs 183 crore in FY21.

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Et exclusive: murthy's catamaran ventures and amazon india decide not to renew jv next year in cloudtail.

Catamaran and Amazon, the two partners have mutually decided to not continue their joint venture beyond the end of its current term ending on May 19, 2022.

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• Amazon and NR Narayana Murthy's Catamaran to end their joint venture next year

Amazon and NR Narayana Murthy's Catamaran to end their joint venture next year

Prione business services - the jv between the two companies - was formed in 2014 and is coming up for renewal on may 19, 2022.

The JV has enabled over three lakh sellers and entrepreneurs to go online, and helped 4 million merchants with digital payment capabilities. Shutterstock

E-commerce major Amazon and NR Narayana Murthy's Catamaran on Monday said they will not continue their joint venture - Prione Business Services - beyond May 2022. The announcement came on a day when the Supreme Court ruled that Amazon and rival Flipkart will have to face a probe by the Competition Commission of India into allegations of violations of the competition laws. Prione Business Services - the joint venture between Amazon and Catamaran - was formed in 2014 and is coming up for renewal on May 19, 2022. "The two partners today announced they have mutually decided to not continue their joint venture beyond the end of its current term," a joint statement said on Monday. The JV has enabled over three lakh sellers and entrepreneurs to go online, and helped 4 million merchants with digital payment capabilities, it added. Amazon and Catamaran, however, did not disclose the reason behind the decision. The companies also did not comment on the fate of Cloudtail India - a wholly-owned subsidiary of Prione Business Services and one of the biggest sellers on Amazon.in. Prione did not comment on a detailed questionnaire seeking a response on the future of Cloudtail's operations in India and its impact on employees. Cloudtail India had clocked a 27.6 per cent rise in revenue to Rs 11,412.75 crore in FY20 from Rs 8,944.71 crore in FY19, as per regulatory documents. Its net profit more than doubled to Rs 67.54 crore in FY20 as against Rs 29.38 crore in FY19, according to the documents. Amazon and Catamaran have announced the decision to part ways at a time when there is a greater scrutiny on the operations of e-commerce marketplaces in India that have foreign investments. In 2020, fair trade regulator CCI ordered a probe against Amazon and Walmart-owned Flipkart for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms. Trader bodies like CAIT have also contended that such practices by these companies have severely impacted the business of offline retailers. Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal on Monday said it is unlikely that the Amazon-Catamaran JV is being ended as part of a strategy to avoid an investigation that may take place when Amazon is probed. Certain questions are bound to arise for Cloudtail that will have to be answered when CCI investigates Amazon's business module, he added. CAIT had previously written to Commerce Minister Piyush Goyal to conduct an investigation into the role of Cloudtail India. In 2018, the government had introduced stricter norms for e-commerce marketplaces with foreign investments. Following this, Prione Business Services was restructured. While the companies did not divulge details, sources had said Amazon's holding came down from 49 per cent to 24 per cent stake post the restructuring. In the joint statement on Monday, Catamaran President MD Ranganath said: "As our JV with Amazon reaches the end of its tenure, I reflect on this successful partnership that introduced the power of digitisation and empowered hundreds of thousands of SMBs across big and small towns. We would like to thank Amazon for the partnership that leaves behind a strong legacy of shaping e-commerce in India". Amit Agarwal, Global Senior VP and Country Head - Amazon India, said the companies had 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," he added.

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