Amazon India shifts focus to third-party sellers

By

Isabelle Crossley

Published
Aug 12, 2019

Amazon India has shifted its focus from vendors in which it owns a stake to a group of medium-sized sellers, as it works with the current foreign direct investment regulations and the business eyes $15-$16 billion (Rs 99,791 crore to Rs 1 lakh crore) in India sales in calendar year 2020. 

Amazon India is focusing on a group of around a dozen medium sized sellers on its e-commerce platform, sources told TNN.

As the business moves away from large sellers in which it has a stake, such as Cloudtail and Appario, it is developing sellers including Rocket Kommerce, Primarc, and Redlily.

“Cloudtail is doing about 24% of sales, while Appario is under 20%,” an anonymous source told TNN. “Small merchants would do about 20-25% of sales on its marketplace here. This is where the 30% chunk becomes critical for the e-tailer.”

The medium sized third party sellers now account for between 30% and 33% of the e-commerce site’s sales, up from 20% earlier, according to the sources. Where Cloudtail and Appario previously accounted for 50% of Amazon India’s sales, the two businesses now account for considerably less.

The move away from the two sellers is in part a reaction to the FDI regulations brought in this spring, which do not allow online marketplaces to influence pricing on their platforms.

Amazon India aims to reach a gross sales total of between $15 billion and $16 billion during the 2020 calendar year. The business reported around $7 billion in gross sales in the 2018 calendar year.