‘Mini Cloudtails’ mushroom on Amazon after top seller shuts down

A slew of new sellers on Amazon India share a tie-up with Cloudtail, the now-defunct former online marketplace leader.

These new entities are led by former Cloudtail executives as well as Appario Retail, another company that is still a seller on the platform.

According to their profiles on the professional networking platform LinkedIn, these former Cloudtail and Appario employees are CEOs or hold other leadership positions in the new seller companies that have taken over various segments of Cloudtail’s business on Amazon India.

Appario Retail, a joint venture between the Patni Group and Amazon, is one of the top sellers on Amazon India. Clicktech Retail, RetailEZ, Cocoblu Retail are among the new merchants that have taken over business from Cloudtail.

Cloudtail operated as a joint venture between Amazon and

founder of NR Narayana Murthy’s Catamaran Ventures, but has ceased operations on Amazon as a seller amid regulatory pressure.

Indian law does not allow a foreign entity operating an online marketplace and its group companies to own shares in or control the stock of any seller on the platform. The government has red-flagged the proximity between sellers and e-commerce marketplaces after small traders alleged that e-commerce companies were promoting their favorite sellers on the platforms.

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True, Amazon does not own any stake in the seller’s new outfit. While having executives with experience working with Amazon sellers would help both new firms and the platform integrate businesses quickly, they could be watched closely to find the desired regime.

An Amazon India representative told ET that the company does not comment on behalf of its sellers. Emails sent to the new vendors were not answered by press time Sunday.

Former Cloudtail employees hold a variety of key roles at start-up companies, from mid-level positions such as warehouse managers and supplier managers to C-suite executives. Mouli Venkataraman, who was previously the head of Cloudtail, is now the CEO of Cocoblu Retail, which sells books, apparel, office supplies and other categories on Amazon India. Former Cloudtail category leader Rehan Sheikh has taken over as CEO of Clicktech Retail. From their LinkedIn profiles, ET found several other executives at various levels of new vendor firms who previously worked at Cloudtail or Appario.

β€œIt’s basically like a mini-Cloudtails, and you’re basically working with the same group of people who are also well trained in the Amazon engine. This is mainly done to ensure a smooth transition and ensure that there is no impact on sales,” said one of the brands selling on Amazon.

The brand promoter recently moved from Cloudtail to one of the new selling companies.

“Relationships are important here,” said an e-commerce executive associated with well-known brands. “Take Cocoblu as an example, it takes care of books among other categories, and that’s very important to Amazon… If Amazon just reassigns the category to sellers who don’t have a relationship with publishers, their sales will drop significantly.”

Previously, Cloudtail came under scrutiny for its close ties to Amazon. Sumit Sahai, an Amazon executive, became CEO of Cloudtail in 2017. He spent more than four years in that role before returning to Amazon last year. In August last year, ET had reported that one of Amazon’s category leaders, Amandeep Lohan, had been appointed as the managing director of Appario Retail. Ranjit Babu, the last CEO of Cloudtail, has also now returned to Amazon as a director, selling partner expertise.

On April 25, ET reported that Amazon would absorb all employees of Cloudtail’s parent company Prione, citing then-CEO Pankaj Jathar’s employee town hall address.

Moving from Cloudtail

But the transition from Cloudtail hasn’t been smooth, with several brands ET spoke to saying they’ve faced payment delays as new sellers face technology and workforce challenges. On July 8, ET reported that FMCG sales, in particular, were down on Amazon due to the switch.

Cloudtail is no longer sold on Amazon India after the US e-commerce giant bought 100% stake in Prione.

Amazon’s departure from Cloudtail began in March of this year after it sent out termination notices to sellers and their business was transferred to new entities.

According to ET, part of Cloudtail’s electronics business has been transferred to VRP Telematics and Dawntech Electronics. Its health and personal care products business was transferred to Rocket Kommerce and its fashion and apparel category to Cocoblu Retail.

These new sellers are supported by various old economy companies. ET reported on July 26 that Kolkata-based apparel maker Rupa and the company’s third-generation promoters β€” Siddhant Agarwal and Aparesh Agarwal β€” have launched a new merchant business called RetailEZ on Amazon India.

Likewise, Dawntech is owned by South India’s leading real estate company Salarpuria-Sattva Group. Cocoblu Retail is a newly established e-commerce retail company that was incorporated in October last year and has a subsidiary based in Delhi.

which received Rs 350 crore from promoters in January.

Rocket Kommerce, a well-known online retailer under the RK group, was a seller of OnePlus smartphones on Amazon India before venturing into the personal care and consumer goods business.

VRP Telematics is also a seller on Amazon India and also works for the e-commerce company’s private labels such as Solimo and AmazonBasics.

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