Amazon vendor Cloudtail looks to exit food space

Amazon’s largest Indian vendor Cloudtail is preparing to exit the food segment as the US company’s fully owned food-only retailing arm has stepped up selling local output on Amazon. in, said two industry executives aware of the development. 

Cloudtail is enrolling independent vendors to sell imported food products that Amazon Retail India (ARIPL), the subsidiary of the US major, cannot trade on its marketplace.

Licence norms permit sales of only locally produced and packed foodstuff through both offline and online channels.

“Cloudtail will no more buy locally produced food and that will be entirely done by ARIPL,” said one of the two executives cited above. Hence, Cloudtail is appointing independent sellers for imported food products that ARIPL is not allowed to sell on the platform, sources said.

“ARIPL continues to scale up its infrastructure and selection for made-in-India food items. It is on track with its plans to partner with the Indian agricultural community toward creating a modern farm-to-fork food supply chain of processing, warehousing and distribution hubs to connect with the end-consumer across India,” an Amazon spokesperson said in an emailed response.

Cloudtail did not respond to ET’s mail seeking its comments. In 2017, New Delhi approved Amazon’s proposal to invest $500 million to sell locally produced food items through both brick-and-mortar stores and the e-commerce platform.

After more than a year, Amazon’s food-only retailing venture finally started selling products on the marketplace, although the services are yet to scale up.

A New Delhi-based supplier to Amazon said that the US giant has even segregated warehouses for ARIPL and Cloudtail that were earlier shared. While the Indian made food products go to ARIPL warehouses, imported food items go to separate warehouses for Cloudtail.

Experts say cutting down on food products will also help Cloudtail remain within the 25% cap a vendor is permitted to sell on any one e-commerce marketplace. Cloudtail is a joint venture between Amazon Asia and Infosys founder NR Narayana Murthy's peinvestment vehicle Catamaran.