Ecommerce Policy: Amazon Stops Replacing Items By Cloudtail; Removes ‘Amazon Exclusive’ Branding

The new ecommerce policy of India, which has come into force effective February 1st, 2019, is proving to be a big headache for not only the consumers  but also brands which built their customer base via ecommerce portals.

Fresh reports are coming in, regarding new wide-spread changes in the ecommerce sector, and the news is not good at all.

Amazon Stop Replacing Items By Cloudtail, Appario

As per the latest communication shared by Amazon India, they have informed all affiliates, sellers and customers that from now on, items sold by Cloudtail, Appario will not be replaced, and in fact, no products will be available to buy as well.

However, for products bought earlier, the refund shall be processed in the customer’s Amazon Account.

The notice from Amazon India reads: “Starting February 1, 2019, FBA sellers such as Cloudtail India, Export LLC, Appario and Amazon Retail India (ARIPL) will temporarily be unavailable on the Amazon marketplace,”

In case any product has been bought from these sellers after January 31st, 00:00 hours, there shall be no replacement.

Amazon has a stake in both Cloudtail, Appario, and as per the new guidelines, ecommerce portals having FDI cannot sell via their own entities. Cloudtail is a JV between Amazon and Narayana Murthy’s Catamaran Ventures, and was one of the biggest retailers of Amazon in India.

Amazon Exclusive Removed

Under Amazon Exclusive branding, Amazon used to forge an exclusive partnership with brands, and then sell their products. OnePlus was a classic example for such partnership.

Effective February 1st, such exclusive partnerships have now become a thing of past.

Under the new ecommerce policy, such exclusive deals and offers cannot be created, and thus, Amazon Exclusive branding has been removed.

In a message to all affiliates, Amazon India said, “Pursuant to an internal mandate, Amazon has decided to cease the use of the phrase ‘Amazon Exclusives’ in all formats and across all media (both online and offline marketing and communication channels).”

Affiliates are now encouraged to use phrases such as ‘Available Online on Amazon.in’, instead of Amazon Exclusive.

Reports are also coming in, that delivery of products ordered via Amazon India and Flipkart are taking longer time – from 2-3 days average, the delivery time has now increased to 5-7 days.

Amazon India’s New Arrangement

Since Amazon India cannot sell products via their largest retailers: Cloudtail, Appario, a new arrangement is being worked out, which bypasses the new ecommerce policy.

As per some unconfirmed reports, Amazon India is now planning to convert both Cloudtail, Appario as wholesale entities, which can operate under B2B model.

B2B model is still allowed for FDI powered ecommerce marketplaces.

If reports are indeed true, then retailers such as Cloudtail, Appario will now work as B2B entities, dealing in wholesale of products. Now, these will deal with preferred, and trusted 3rd party vendors, who will list their products on the ecommerce portals, and sell the products to the customers.

This arrangement will make them a complaint to the new ecommerce rules, and solve the problem.

Interestingly, Flipkart had made this arrangement since the start, and hence, they haven’t experienced much disruption in the operations, unlike Amazon. Flipkart’s wholesale arm buys products from the manufacturers and then sells them via preferred third-party vendors with whom they have no legal partnership.

There has been no reply from Amazon or Cloudtail, Appario in this matter.

We will keep you updated, as more details come in.