Once among the largest sellers on Amazon India online marketplace, Cloudtail India has reported an 84% year-on-year plunge in operating revenue in FY23 to Rs 2,977.8 crore. According to a report in Economic Times, quoting company intelligence platform Tofler, the fall comes as the company has stopped selling on Amazon to fall in line with the regulations, according to filings made with the Ministry of Corporate Affairs.

“During the financial year ended on March 31, 2023, the board of directors in its meeting held on March 17, 2022, approved the cessation of business-to-consumer (B2C) business of the company on or prior to April 23, 2022, which was followed by shareholders’ approval in its extraordinary general meeting held on March 19, 2022. Accordingly, the company ceased to carry its B2C business with effect from April 23, 2022,” the filing said. With the fall in revenues, Cloudtail’s net loss also contracted to Rs 97.8 crore in FY23 from Rs 521.8 crore a year earlier.

The report further adds that the parent company of Cloudtail India has been renamed from Prione Business Services to Amazon Smart Commerce Solutions. In 2022, Amazon became a full owner of Prione after acquiring a 76% stake from Infosys founder NR Narayana Murthy’s Catamaran Ventures.

Why Amazon cut down its stake in Cloudtail
Cloudtail India was set up in 2014 as a joint venture between Amazon and Catamaran Ventures. It happened to be one of the biggest sellers on Amazon India. However, Amazon was forced to trim its stake to 24% from 49% in 2019 to comply with the country’s foreign direct investment (FDI) regulations for the ecommerce sector.

Subsequently, the company announced that Cloudtail would cease to be a seller on the marketplace as the latest norms did not allow an entity running an online marketplace and its group companies to own equity in any of the sellers on the platform or to have control over their inventory. Cloudtail India continues to provide certain services on the Amazon marketplace such as seller onboarding, and merchandising and cataloging of products on the platform.

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