Amazon is one of the largest eCommerce brands in India and Cloudtail is Amazon India's largest seller was established in 2014. Recently, Cloudtail India has been sending contract termination letters to some of its vendors. The firm stated that it is halting the product listing process on Amazon Marketplace.
The termination letter from Couldtail has caused anxiety among various small-scale vendors. In the letter, Cloudtail's MD and CEO Ranjit Babu stated that Cloudtail would sell its existing inventory, including the products obtained from the sellers. He also assured the vendors to process all the purchase orders raised by the firm till April 18, 2022.
Sellers are worried as they are clueless about the movement of their current inventory and businesses. But, the managers from Cloudtail have ensured that the sellers will soon get further information from the company. According to some vendors, after receiving the letter, they tried contacting their respective Cloudtail managers, but there was no clear response about the transition process. They also added that they had got information that some Cloudtail vendors have got new agreements to transfer their business to other seller entities.
Cloudtail has been the key pillar in the success of Amazon in India, and it used to handle around 50% of the total sale of Amazon. After Cloudtail FY15 losses, the total revenue of the company in FY21 grew around 45% to reach INR 16,639 Crore, and the total profit of the company was INR 182 Crore.
Cloudtail, which Prione Business Services operate, has 6000-7000 vendors; due to this, the transition process will take more time. Prione Business Services is the owner of Cloudtail, a joint venture between NR Narayana Murthy's Catamaran Ventures and Amazon. The Competition Commission Of India has cleared the deal between Amazon and Catamaran Ventures. In the deal, Amazon proposed to purchase Catamaran Ventures' 76% stake.
With this deal being done, according to Prione's CEO, Pankaj Jathar, Amazon will now absorb all Prione Business Services' employees, including Cloudtail's. He also stated that the complete transition process would be completed by the end of May. The total number of employees that Amazon will absorb is 1000-1200.
Reacting to the news of Cloudtail shut down, the secretary-general of CAIT, Praveen Khandelwal, said that this would not impact the vendors. He stated that as Cloudtail is a seller itself and does not have a series of sellers when its contract with Amazon will over, Amazon will find new sellers.
Pavankumar Baboori is an experienced Sr. Content Analyst who improves the workflow by identifying and resolving the content development gap. He works closely with the marketing team to deploy strategies for improving brand awareness, website traffic, search engine ranking, and lead generation activities. He gauges up marketing channels for the real digital transformations.
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