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Stage

Corporate Minority - II | Alive

Total Raised

$40.65M

Last Raised

$18.8M | 4 yrs ago

About Appario Retail

Appario Retail, fka Aristotle Sales & Marketing, primarily deals in wholesale and retail. The company acts as a reseller, distributor and stockist for all kinds of goods, services and merchandise.

Appario Retail Headquarter Location

India

Latest Appario Retail News

Who will fill the void left by Cloudtail on Amazon and will Appario face the same fate?

Aug 11, 2021

By 2 hours ago As Cloudtail ceases operations and Appario’s future hangs in the balance, experts weigh in on the ramifications that will be felt by consumers and predict Amazon’s next steps. Following the surprise announcement on Monday that Amazon and Catamaran are ending their joint venture partnership in Prione Business Services, which owns Cloudtail, from May next year, two important questions emerged: 1) who will fill the void left by Amazon’s largest seller and 2) will Appario, the second-largest seller on the platform, face a similar fate. Why it matters? According to a Reuters report, Cloudtail and Appario account for nearly 35 percent of the sales on Amazon. These two companies are the dominant sellers across popular categories like smartphones, electronics, daily necessities, and fashion. Without answers to these two questions, consumer welfare will inevitably take a hit as product availability and variety will reduce on the platform. Who will fill the void left by Cloudtail? Several smaller sellers: “Amazon has already been creating multiple smaller sellers, and the volume of Cloudtail will simply shift to them now”, Nikhil Varma, Managing Partner, Miglani Varma and Co, told MediaNama. Several industry executives confirmed the same with the Economic Times  saying that Amazon will appoint several independent sellers to take over the business from Cloudtail. Amazon is not expected to have any stake, directly or indirectly, in these sellers, and Amazon will only provide assistance to these sellers, the executives stated. This is being done to ensure that no single seller has a dominant position in the marketplace, the executives added. Brand authorised sellers: Amazon has also reached out to some large brands. Three big electronic brands are in initial stage talks currently, to see if they can appoint authorised sellers, the ET report said. “The end of the JV would, indeed, be a stumbling block but, given the strength it has infused in the market in years since its inception, it would only be momentary and it wouldn’t be long before the creases are ironed out and the things are back on track,” Siddharth Jain, Co-Founding Partner, PSL Advocates & Solicitors told MediaNama. Will Appario face the same fate? Brief history of Appario: Like Cloudtail, Appario Retail is a seller on Amazon in which the e-commerce platform has an indirect stake. When the Indian government modified FDI rules in 2016 stating that an e-commerce marketplace cannot derive more than 25 percent of its overall sales from a single vendor, which at the time, Amazon was allegedly doing  through Cloudtail, Amazon formed a 51:48 joint venture with Patni Group to set up Frontizo Business Services, which in turn, established Appario Retail. After the government further tightened FDI norms in 2018, Amazon reduced its share in Appario to 24 percent. How big is Appario? While Cloudtail is the most well-known seller on the platform, Appario is a close second. According to the Reuters report, while Cloudtail was referred to as “Special Merchant” or “SM” in internal documents, Appario was referred to as “SM2.” Amazon “estimated the two special merchants would together account for about half of the sales on its platform,” the report stated. Cloudtail allegations apply to Appario as well: All the allegations that brick-and-mortar retailers and smaller online sellers have made against Cloudtail also apply to Appario. Organisations like Confederation of All India Traders (CAIT), Delhi Vyapar Mahasangh (DVM), Swadeshi Jagaran Manch (SJM), and All India Online Vendors Association (AIOVA) have long alleged that sellers like Cloudtail and Appario receive preferential treatment from Amazon in terms of better search rankings and discounted fees. Appario faces similar external circumstances: “The move by Amazon may be seen as a pre-emptive step on their part in view of the proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020, which prohibit any “related parties” or “associated enterprises” of the platform inter alia from selling on the platform, and/or using the information received by the platform to their advantage. Also, it seems to be no coincidence that the announcement was preceded by the Hon’ble Supreme Court’s nod to the CCI probe against Amazon. Given the circumstances and the non-renewal of the Cloudtail JV, it is likely that Appario can also see a similar fate as that of Cloudtail,” Anu Sura, Counsel, PSL Advocates and Solicitors, told MediaNama. So, will Appario cease operations as well? It appears that only time (or Amazon) can tell for certain. According to Reuters , Amazon is in talks with the parent of Appario to determine whether it wants to renew its joint venture next year, and according to unnamed industry executives cited by  Economic Times , the decision to pull out of this JV is likely. But, only a few days back, Amandeep Lohan, previously a category leader at Amazon India, was appointed the managing director and CEO of Appario Retail for a period of five years, creating uncertainty in the claims that the JV will end. Why might Appario not face a similar fate? If Amazon ended its Cloudtail partnership for reasons other than regulatory pressure and competition allegations, due to differences with Catamaran for example, then Appario is unlikely to suffer a similar fate. But experts with whom MediaNama spoke suggested that the former is more likely the reason. Also Read

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