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Amazon to End Partnership with Narayana Murthy’s Catamaran Ventures from May 2022

Amazon India and Catamaran’s JV — Prione Business owns Cloudtail India, one of the largest sellers of Amazon India
The announcement comes after Supreme Court allowed CCI to probe into Flipkart & Amazon for anti-competitive practices.
Earlier this year, Cloudtail received a tax notice demand to the tune of INR 54.5 Cr

The leading e-commerce company has discontinued its partnership with NR Narayana Murthy’s Catamaran Ventures following harsh criticism from trade associations and politicians for unfair trade practices.
Cloudtail India, Prione Business Services’ wholly-owned subsidiary, is one of Amazon’s largest sellers in India.

“The two partners have mutually agreed not to continue their joint venture beyond its current term,” Amazon announced in a statement on August 9.

The ruling came after the Supreme Court of India allowed the Competition Commission of India (CII) to investigate Amazon and rival Flipkart for unfair trade practices.

Prime One Business Services Pvt. Ltd had operated in India for 7 years, and the joint venture between Amazon and Catamaran was due for renewal on May 19, 2022.

According to Amit Agarwal, global senior vice president and country head, Amazon and Catamaran have partnered since the beginning of e-commerce in India with a vision of transforming hundreds of thousands of small businesses in a fast-changing digital world.

With the unrelenting efforts of hundreds of its employees, the JV succeeded in helping online commerce evolve, positively impacting over 4.3 million small businesses, creating hundreds of thousands of jobs, and contributing to India’s digital economy. It was a privilege to have had a partner we could lean on and learn from. “I would like to thank Catamaran for this long and fruitful partnership that helped set the direction for e-commerce in India,” he added.

The development comes when the government is trying to address the burning issues of preferred vendors and online discounting, which have marred the growth of offline retailers in India.
In India, e-tailers are known to be having a set of preferred vendors who get a majority of the business generated by these companies.

As of 2018, the government had issued Press Note 2, which modified Press Note 3. Markets are asked to ensure that they will not sell the products of their group companies on their platforms.
Amazon, which gets the majority of its business from Catamaran, reorganized its structure in India after the clarification.

Catamaran Ventures increased its stake in Prione Business Services in February 2019. The move reduced Amazon Asia’s stake in Cloudtail to 24% from the earlier 49%, with Catamaran Ventures’ stake rising to 76% from 51% earlier.

After this, Cloudtail ceased to be an Amazon group business, making it compliant with the rules on the papers but yet not serving the purpose with which the norms were straightened.

Even as the issue was ironed out on paper, the company kept facing persistent hiccups from offline traders.

In February, the Confederation of All India Traders (CAIT) also said that Indian companies were hand in glove with Amazon accusing retail giant Narayana Murthy of helping the company circumvent Indian laws.
A letter was written to Piyush Goyal, Minister of Commerce and Industry, demanded an investigation into the matter.

As far as Cloudtail’s activities on Amazon’s eCommerce platform are concerned, both companies are two sides of the same coin,” said Praveen Khandelwal, general secretary of CAIT.

Even Commerce and Industry Minister Piyush Goyal said last month that companies should avoid forum shopping and let the CCI investigate whether they were doing an honest business.

“Prione has leveraged global best practices for e-commerce in India, created jobs, and provided millions of Indian customers with access to products from across the country through technology.” As our joint venture with Amazon draws to a close, I reflect on this successful partnership that brought the power of digitization to SMBs across the nation. The Catamaran would like to thank Amazon for the cooperation, which will leave a strong legacy of e-commerce in India,” said M.D. Ranganath, President of Catamaran.

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