Top Amazon vendor Cloudtail delays payments to suppliers

New Delhi: Cloudtail India, one of the largest sellers on Amazon’s India marketplace, is delaying payments to brands and suppliers because the Covid-19 outbreak and the ensuing lockdown have hit business. Amazon is a minority stakeholder in the company.

“Governmental restrictions given the Covid-19 outbreak and the advisory to sell only essential products have impacted our supply chain and restricted our operations,” Cloudtail said in an email to one of its large vendors that ET has seen. “In view of the same, please expect a delay in processing of your payment.”

Cloudtail said it’s working with stakeholders to ensure that the disruption is minimised. “We are actively working with vendors, employees, marketplaces, banks and regulators to get through these testing times,” a Cloudtail spokesperson said in an email to ET.


‘In Constant Touch with Vendors’
“We are in constant touch and are actively working with them to sort out the issues they face in respect of payments after the lockdown.”

Cloudtail hasn’t made payments since March 23, according to various executives at large fast-moving consumer goods (FMCG) vendors and companies. They include an official at an FMCG multinational who directly handles the ecommerce accounts of various platforms, including Amazon and Flipkart. Cloudtail is generally not known to delay payments, said the people cited above.

“This is an unprecedented crisis which has disrupted the lives of people and businesses at a very large scale,” Cloudtail told ET. “We understand and deeply empathise with the challenges faced by our vendor partners during this difficult period, due to this extraordinary, uncontrollable event that all of us are experiencing.”

The Centre has restricted ecommerce companies to home deliveries of essential goods, forbidding them from selling so-called non-essentials. That has hit many sellers of items ranging from apparel to electronic goods such as Cloudtail, which is saddled with a large inventory of such goods, said the people cited above.

“We expect the situation to normalise when the nationwide lockdown is relaxed and we resume regular operations,” Cloudtail said in its email to vendors.

Cloudtail is owned by Prione Business Services, a joint venture between Infosys founder NR Narayana Murthy’s Catamaran Ventures, which has a 76% stake, and Amazon, which holds 24%. It posted revenue growth of 25% to Rs 8,945 crore and a profit of Rs 29.4 crore in FY19, according to regulatory filings.

Cloudtail was in the news in 2018 after India amended its foreign direct investment rules for ecommerce marketplace and the joint venture had to change its shareholding structure to stay compliant with the changed norms. Amazon reduced its stake in Prione from 49% to 24% in February 2019 as part of this exercise.