Global ecommerce giant Amazon and Catamaran, the personal investment arm of Infosys co-founder NR Narayana Murthy, have decided to end their joint venture that was formed seven years ago to help small and medium enterprises to tap the digital opportunity.
Amazon and Catamaran said in a joint statement that they will not continue the JV -- Prione Business Services Pvt. Ltd -- beyond May 19, 2022.
The statement did not specify why the JV was being ended even as both the parties expressed how successful the partnership was.
The decision to end the JV comes as the Supreme Court on Monday said that Amazon and Walmart-owned Flipkart must face antitrust investigations ordered against them in India. Last year, the Competition Commission of India (CCI) last year had ordered the investigation against the ecommerce companies for allegedly promoting select sellers on their e-commerce platforms and using business practices that suppressed fair competition.
M.D. Ranganath, president, Catamaran, said that Prione has leveraged global best practices for e-commerce in India, created jobs, and provided millions of Indian customers access to a wide selection of products from across the country.
Amit Agarwal, global senior VP and country head, Amazon India, added that the JV exceeded its vision of helping online commerce evolve and contributed to India’s digital economy.
Amazon had formed the JV with Catamaran in 2014 with the latter owning 51%. Prione was originally known as Taurus Business & Trade Services Pvt Ltd and its wholly owned subsidiary Cloudtail is one of Amazon's largest sellers in India. But the JV has had a rocky period since its commencement. Soon after the formation of the JV, there were concerns about Amazon coming under closer regulatory scrutiny.https://www.vccircle.com/amazons-jv-catamaran-now-seller-its-india-marketplace/ Media reports were already rife at that time that suggested the Enforcement Directorate had been investigating Amazon as well as others like Flipkart for violating the norms.
To address the controversy surrounding FDI in ecommerce, the government in 2018 issued Press Note 2, which asked the marketplaces to ensure that they will not sell the products of their group companies on their platforms.
Following this Amazon did a rejig in its structure in India. In February 2019, Catamaran Ventures increased its stake in Prione Business Services to 76% and reduced Amazon Asia's stake in Cloudtail to 24%. After this rejig, Cloudtail was no longer Amazon group company that made it compliant with the rules but the ecommerce company continued to face criticism from offline, leading to CCI last year ordering probe into the ecommerce company along with Flipkart.