Bengaluru: A section of merchants have accused Amazon India, an online marketplace, of favoring a few select sellers. Amazon India has denied all the allegation and said that it does not favor any seller. The allegations came after the annual financial numbers of one of Amazon India’s sellers, Cloudtail India went up significantly.
It is a joint venture between Amazon and Narayana Murthy, co-founder of Infosys, family office Catamaran Ventres has been one of the mail sellers of Amazon India since late 2014. Despite 24 per cent of increase in sales in 2016-17, the commission paid by the company to Amazon India dropped by 25 per cent.
The delivery charges of Amazon Seller Services also went up by 68 per cent to Rs. 2,549 crore in 2016-17. Few sellers said that Amazon subsidized logistics costs for specific sellers.
A spokesperson for the All India Online Vendors Association (AIOVA), a body of over 3,500 online merchants said, “A normal seller is charged commission, logistics, storage fee, fixed fee, pick and pack fee, return charges, penalty, and other such charges, which increase the cost of selling on gross sale.”
He further added, “Cloudtail’s cost of selling is only 5% of its net sales. Amazon is clearly subsidising Cloudtail and Appario. We will take this up in a fresh petition with (the Competition Commission of India).” He also said that the cost of selling on Amazon India for most other merchants is above 20% of net sales on most categories.
Appario, a joint venture between Amazon India and Patni Group, was established last year, as was another JV with Shoppers Stop.
Spokesperson of Amazon India said that our continued belief is that a robust marketplace cannot be built on a single seller focused strategy. We have an equal relationship with all the sellers on our marketplace and we support them with various services that help them leverage India’s growing digital economy.
In a letter to CCI last month, AIOVA similarly accused Flipkart of indulging in “unfair and discriminatory” practice of giving goods to seller entities that it controls at a discounted price through Flipkart India, the ecommerce company’s wholesale arm.
Amit Daga, MD of Deal Kya Hai, an online retailer of consumer electronics, said that in 2016-17, Amazon brought in 11 top merchants under its platinum seller programme to meet sales targets while reducing dependence on Cloudtail. Amazon had to comply with new guidelines issued in 2016 that put a limit of 25% of the total sales by a single seller on an FDI-backed marketplace.