Amazon Wholesale India, the B2B arm of the American e-commerce giant, reported a 70 percent decline in its revenue at Rs 3,388 crore for the financial year ending March 31.
It posted a revenue of Rs 11,250 crore the year before, according to regulatory filings sourced from data intelligence platform Tofler.
Amazon Wholesale buys products in bulk from manufacturers and sells to platform sellers who sell on its marketplace.
The company attributed the drop to the change in the government regulation resulting in lower customer adoption.
It was referring to Press Note 2 which was introduced by the government with an aim to bring a level playing field between online and offline retailers in December 2018. It got implemented in February 2019.
The government tightened norms for online retailers, making it more difficult for them to use their nearly endless stream of foreign capital to fund high discount and cover group companies into the ambit of (foreign direct investment) FDI norms.
"The inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25 percent of purchases of such vendor are from the marketplace entity or its group companies," the Press Note 2 said.
Though Amazon Wholesale hasn't clarified that, given the numbers it can be assumed that it gave up a significant chunk of its business going to Amazon sellers, reducing it to less than 25 percent with an aim to abide by the rule.