Amid pangs, Amazon Retail wins govt nod

BENGALURU: In what could be a significant breather for Amazon India, the government has allowed the e-tailer's food retail license holding entity, Amazon Retail (run by Amazon India Retail), to sell on the India marketplace. A person directly aware of the matter said Amazon's food retailing license rights under this entity won't be superseded by the December FDI clarifications of Press Note 2. 

After gaining clarity on this from the government, on Tuesday night Amazon Retail made a comeback on Amazon India. As of now, it is largely moving products for Amazon's Pantry (monthly grocery services) and other daily-movables. Amazon Retail being allowed to sell on Amazon India could be a shot in the arm for the local arm of the Seattle-based e-tailer as removing Cloudtail and Appario has hit its daily sales hard. 

Amazon India had to delist about 500,000 products from Cloudtail, Appario and Shoppers Stop - all the sellers in which the company holds a stake - according to data from Market Pulse, which tracks sellers on the platform.

"Amazon had reached out to the government-- Department for Promotion of Industry and Internal Trade (DPIIT)--whether Amazon Retail can continue to sell and DPIIT has given the green signal on the same. Amazon, since then has managed to put a wide range of products back on its platform," this person said. 

An Amazon spokesperson confirmed the development without giving details. "ARIPL, with the specific approval for food retail, remains compliant to all relevant laws," the spokesperson said in an emailed statement. 

A Deutsche Bank note has said 'alpha-sellers' contribute about 60-70% of total sales of a marketplace. 

Prior to the comeback of Amazon Retail, Pantry was one of the main services that was made unavailable to users here after February 1. Delivery timelines of these products have also now come down with Amazon Retail back in the play. In 2017, Amazon was given the food-retail license in India and the company announced an initial capital commitment of $500 million. This is on top of Amazon’s $ 5 billion investment for e-commerce business.