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Amazon India suspends exclusive seller programme ahead of GST rollout

19 June, 2017

US-based online marketplace Amazon Inc’s India subsidiary has temporarily suspended its exclusive, invitation-only Platinum Seller Program (PSP) for top sellers, according to a report in a financial daily.

The e-commerce giant has not renewed the contracts of top sellers on its platform as it is reportedly awaiting clarity on the impending Goods and Services Tax (GST), The Economic Times reported on Monday citing four people in the know.

With the contracts not being renewed, Cloudtail India—a joint venture between Amazon.com and Infosys co-founder Narayana Murthy’s investment firm Catamaran Ventures—has become the only Platinum seller on Amazon India, the report added.

“Our PSP programme is ongoing. The details of our engagement with our sellers are confidential and we do not discuss them externally,” an Amazon India spokesperson said in response to queries from VCCircle.

The Platinum programme requires sellers to achieve sales targets and meet metrics but, at the same time, provides them benefits like reduced marketplace fees and logistics costs, the ET report said.

In February, The Hindu Business Line reported that after demonetisation, Amazon.in had trimmed the number of its Platinum Sellers. In October 2016, the e-tailer had 13 mobile phone category Platinum sellers and that number was reduced to four early this year, the report stated.

Amazon India’s losses for the fiscal year ended March 2016 soared to Rs 3,572 crore from Rs 1,724 crore. The company’s revenues jumped to Rs 2,275 crore this year compared with Rs 1,022 crore last year.

Cloudtail India Pvt. Ltd had registered a four-fold jump in revenue for 2015-16. Revenue for the year ended 31 March 2016 increased to Rs 4,591.2 crore from Rs 1,145.4 crore the year before. Net loss shrank to Rs 30 crore from Rs 32 crore, while total expenses jumped to Rs 4,621 crore from Rs 1,176 crore.

Last month, Amazon Wholesale India Pvt Ltd, the business-to-business wholesale marketplace that operates amazonbusiness.in, received Rs 100 crore ($15 million) in funding from Singapore-based Amazon Corporate Holdings Pvt. Ltd and its US-based parent Amazon Inc.

Amazon, which entered India in 2013, invested $2 billion in the country’s operations in 2014. It committed an additional $3 billion in June last year, taking the total investment in the country to $5 billion.

Amazon is deepening its India play, going beyond e-commerce. It has ventured into the beauty services segment, launched video-streaming service Amazon Video Prime, and introduced a programme for startups, Launchpad, to market its products to customers across the country.

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Amazon India suspends exclusive seller programme ahead of GST rollout

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