Rediff.com  » Business » Amazon to end JV with Murthy's Catamaran Ventures from May 2022

Amazon to end JV with Murthy's Catamaran Ventures from May 2022

By Peerzada Abrar
August 10, 2021 11:49 IST
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Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming small businesses in a fast-changing digital world.

E-commerce giant Amazon and Infosys co-founder N R Narayana Murthy’s Catamaran Ventures have “mutually decided” to not continue their joint venture (JV) beyond the end of its current term.

The JV, Prione Business Services, which has been running successfully for the past seven years, was coming up for renewal on May 19, 2022.

 

The JV enabled over 300,000 sellers and entrepreneurs to go online.

It also enabled 4 million merchants with digital payment capabilities, providing these small and medium-sized businesses (SMBs) and merchants access to millions of customers across the country.

"Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming small businesses in a fast-changing digital world by providing online capabilities and enabling them access to customers - both in India and abroad,” said Amit Agarwal, global senior vice-president and country head, Amazon India.

“We are humbled by how the JV exceeded its vision, helping online commerce evolve through the unrelenting efforts of hundreds of its employees, positively impacting over 4.3 million small businesses, creating hundreds of thousands of jobs, and contributing to India’s digital economy.

"We were privileged to have had a partner we could learn from and lean on.

"I would like to thank the Catamaran team for this long and fruitful partnership that helped set the direction for e-commerce in India,” said Agarwal.

When Prione was formed in 2014, e-commerce was still at a nascent stage in India.

The SMBs in India were new to digital and needed support, training, and the tools to go online.

The JV’s vision was to enable Indian SMBs to succeed in e-commerce and benefit from the digital opportunity.

In the past seven years, the JV has made huge strides in this direction, leveraging Catamaran’s India insights and Amazon’s technology expertise.

With feet-on-street teams in 30 cities across India, the JV enabled sellers to sell online and provide a wide selection of products to Indian customers.

The JV also supported the growth of programmes like Karigar and Saheli.

Prione has played an important role in transforming Indian e-commerce, and paving the way for the global scale-up of emerging Indian brands.

“We are happy that Prione has leveraged the best global practices for e-commerce in India, created jobs, and provided Indian customers access to a wide selection of products by leveraging technology,” said M D Ranganath, president, Catamaran.

“As our JV with Amazon reaches the end of its tenure, I reflect on this successful partnership that introduced the power of digitisation and empowered SMBs across big and small towns.

"We would like to thank Amazon for the partnership that leaves behind a strong legacy of shaping e-commerce in India,” he added.

The development comes at a time when the Supreme Court (SC) on Monday refused to interfere with the Karnataka high court order which declined to stop the investigation initiated by the Competition Commission of India (CCI) against Amazon and Flipkart for alleged anti-competitive practices.

However, the court extended the time to join the CCI probe by four weeks.

Some trade associations perceive Amazon and Flipkart as threats to local retailers and have alleged preferential treatment to select sellers.

They have said that Cloudtail, one of the largest sellers on Amazon India website, is owned by Prione.

Legal experts said that both Amazon and Flipkart would now have to cooperate in the CCI’s antitrust investigation.

They said this is because their business model is such that there could be implications related to anti-competitive practices.

They said in the long run, the SC’s decision might create a bigger compliance issue for Amazon and Flipkart.

“It is now a cover-up exercise by Murthy,” alleged Praveen Khandelwal, secretary-general of the Confederation Of All India Traders, about Amazon and Catamaran ending the partnership, adding, “The fact that Amazon is violating the law and foreign direct investment (FDI) policy through Cloudtail must have been known to Murthy long before or even at the time of entering into an agreement with Amazon.”

Khandelwal said the question arises as to why Murthy took this long for taking this decision.

“Did Murthy ever call upon to explain as to why Cloudtail is being used as a preferential seller on Amazon in utter disregard of the FDI policy?” asked Khandelwal.

He said certain questions are bound to arise for which Cloudtail has to give answers when CCI will investigate the Amazon business module.

He alleged that both Amazon and Cloudtail are two faces of a single coin as far as the activities of Cloudtail on the Amazon e-commerce platform are concerned.

“We believe this move of Cloudtail is not a part of a strategy to avoid investigation, which, of course, may take place when Amazon will be investigated,” said Khandelwal.

“But joining hands with a company which does not have any binding with India, except its agenda to dominate e-commerce, has pained traders of the country a lot,” he added.

Photograph: Amit Dave/Reuters

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Peerzada Abrar in Bengaluru
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