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In May 2022, the India team of e-commerce giant Amazon was at a crossroads. It had completed the months-long process to shut the platform’s largest seller aggregator, Cloudtail—the first objective of what was internally called “Project Delhi”. With that began the much greater task of getting thousands of sellers to move to new aggregator firms.  

Seven months since, the companies that divided and took over Cloudtail’s vast seller network and inventory have found it difficult to match their predecessor’s capacity and efficiency—as attested by executives at these firms, Amazon, and the sellers themselves.

At least seven new aggregators took over from Cloudtail. These include the likes of Cocoblu Retail, VRP Telematics, and Dawntech Electronics, according to multiple Amazon India executives, who also said that the number is likely to rise soon.

These aggregators are backed by a diverse set of investors, such as Bengaluru-based real-estate giant Salarpuria Sattva, diversified-investment firm RattanIndia Enterprises, and garments maker Rupa & Co. 

Not everyone is particularly enthused about these changes, though. Many say Cloudtail’s heirs have been struggling to fill its shoes in the Amazon India ecosystem. 

After all, Cloudtail, before dissolution, accounted for at least a third of all items sold on the e-commerce platform, which reportedly reportedly Business Standard GeM closes in on Amazon, Flipkart in gross merchandise value Read more  registered a gross merchandise value (GMV) of $17 billion in the year ended March 2022. 

Old Money

Cloudtail was operated by Prione Business Services, a joint venture between Amazon India and billionaire NR Narayana Murthy’s investment firm Catamaran Ventures

But Cloudtail was doomed to closure two years ago. Its journey to the end started when it faced regulatory heat from the Indian government. The company fell afoul of foreign-investment rules that prohibited overseas companies from having their own inventory in multi-brand retail. Besides, smaller sellers complained of Amazon extending extending The Ken Amazon India’s plans to raise Cloudtail from the ashes Read more preferential treatment to Cloudtail. The simmering scrutiny boiled over when India’s antitrust regulator, the Competition Commission of India (CCI), raided raided ET CCI raids top sellers of Amazon, other etailers Read more  Cloudtail’s offices in April 2022.

This pressure birthed Project Delhi inside Amazon India, a former executive told The Ken, adding that the company started discussions with aggregator firms in which it would not hold any stake.

AUTHOR

Soumyajit Saha

Soumyajit covers the operations of Big Tech companies and OTTs in India. Before The Ken, he covered equity and currency markets in Southeast Asia, Australia and New Zealand for Reuters. You can hit him up via email about anything, except money he allegedly owes you.

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