Ease of Doing Business for MSMEs: Micro and tiny e-commerce sellers’ advocacy group Indian Sellers Collective (ISC) on Monday mentioned it has urged Infosys Founder Narayana Murthy by means of an open letter to finish the partnership with Amazon India for Cloudtail. Cloudtail is a joint venture of Narayana Murthy’s family workplace Catamaran Ventures and Amazon India. ISC mentioned Murthy has been “In cahoots with Amazon through a name-lending arrangement with Cloudtail acting as a front for Amazon’s retail business and defied the objectives of the policies of the Government of India.” Blaming Murthy, the body mentioned that “Just for a fixed fee or returns, he has sacrificed the interests and livelihood of millions of small traders in India and left them at the mercy of Amazon.”
“According to the new e-commerce rules, e-commerce companies running marketplace platforms cannot sell products through companies, and of companies, in which they hold an equity stake. Amazon is circumventing this law by holding a 24 per cent stake in Cloudtail India which indulges in deep discounting and predatory pricing to deceitfully capture the Indian retail market and, in the process, hurting families of millions of retailers in the country whose lives and livelihood depend on their small shops and micro establishments,” Abhay Raj Mishra, President, Public Response Against Helplessness and Action for Redressal (PRAHAR) told TheSpuzz Online.
PRAHAR is amongst the members of ISC. Others incorporated Federation of All India distributors Association (FAIDA), All India Consumer Products Distribution Federation (AICPDF), All India Mobile Retailers Association (AIMRA), All India Online Vendor Association (AIOVA), and FMCG Distributors and Traders Association (FDTA).
Amazon didn’t straight away respond to an e mail looking for comments. An e mail to Catamaran Ventures was also sent looking for comments from Murthy.
Mishra mentioned Murthy’s Catamaran Ventures indirectly holds the rest 76 per cent shares by means of Prione Business Services. Though this arrangement in between Amazon and Catamaran tends to make Cloudtail a Catamaran Ventures-owned business that does not flout any regulation on paper, it is just a name-lending arrangement to circumvent the law, and also Cloudtail is eventually owned and controlled by the mysterious Hober Mallow Trust with Catamaran as the acting trustee, he added.
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Moreover, “the fact that the senior leadership of Cloudtail and its holding company, Prione Business Services as well as many of its board members are former Amazon employees raises serious doubts about its intentions,” Mishra mentioned.
A report by Reuters in February this year had noted that Amazon for years gave preferential therapy to a tiny group of sellers in India, publicly misrepresented its ties with the sellers and also used them to circumvent the foreign investment guidelines.
Last month, the government had proposed amendments to draft Consumer Protection (E-commerce) Rules to ban precise flash sales or back-to-back sales “which limit customer choice, increase prices and prevents a level playing field.” The draft had also proposed to restrict e-commerce organizations from “manipulating search results or search indexes” in order to assure there is no stop preferential therapy amongst sellers.
“Prione Business Services is a joint venture between Catamaran Ventures and Amazon and is the parent company of Cloudtail India. Catamaran Ventures raised its stake in Prione Business Services after the implementation of new e-commerce rules in 2019. The move reduced Amazon Asia’s stake in Cloudtail to 24 percent from the earlier 49 percent, with Catamaran Ventures’ stake rising to 76 percent from 51 percent earlier,” added Mishra.
Amazon along with Walmart’s Flipkart is presently facing a probe by the Competition Commission of India for allegations with respect to preferential seller therapy, deep discounting, and so on. However, each organizations have repeatedly denied any contravention of Indian laws. Nonetheless, “If an Indian leader like Narayana Murthy stops supporting Amazon with the Cloudtail arrangement, it will open up the world of opportunities for lakhs of sellers,” according to Mishra. Amazon is presently heading into its Prime Day sale occasion this month and is ramping up its storage infrastructure for the festive season ahead.