Cloudtail India, the largest seller of Amazon India has reported a 27.76 percent increase in its revenue to Rs 11,413 crore during the financial year ended March 31, as compared to Rs 8,945 crore during the previous financial year.
The wholly owned subsidiary of Prione Business Services, a venture of Amazon.com, Inc and Infosys co-founder NR Narayana Murthy’s Catamaran Ventures, Cloudtail India posted a profit of Rs 68 crore during the period under review, according to documents filed with the Registrar of Companies (RoC), which were sourced from business intelligence platform Tofler.
Its profit stood at Rs 29.4 crore during the previous fiscal.
Cloudtail has often been accused of circumventing the Indian laws which bars foreign direct investment (FDI) in e-commerce companies selling its own products. India only allows marketplace models to attract FDI.
In December 2018, it issued Press Note 2 to further strengthen the rules and tighten the noose around companies trying to exploit the existing rules.
It further emphasised that e-commerce companies will not exercise ownership or control over the inventory. "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 marketplace entity or its group companies," it said.
In order to bypass this rule again, early last year, Catamaran Ventures increased its stake in Cloudtail's parent company from 51 percent to 76 percent. This reduced the stake owned by Amazon Asia to 24 percent ensuring that Cloudtail was not a group company allowing it to sell on Amazon.
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