Amazon plans to delist large seller Appario Retail, in which it retains a stake, from the marketplace, the two announced Monday, a year after ending ties with another large seller Cloudtail in response to retailer allegations that some sellers received preferential treatment.
Amazon and Patni Group-owned Zodiac announced in a joint statement that they have agreed to renew their Frontizo Business Services joint venture, but that Appario Retail will “cease to be a seller” on Amazon India within the next 12 months.
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“The partners will continue to explore new business opportunities, including helping businesses across India to scale up their online presence,” an Amazon spokesperson in India told TechCrunch in a statement.
Amazon did not explain why it delisted Appario, but the move comes amid increased scrutiny of its owned sellers.
According to Reuters, India’s antitrust body raided Appario and Cloudtail earlier this year following allegations of competition law violations.
A Reuters investigation last year revealed that Amazon had given preferential treatment to a small group of sellers on its platform for years, allowing them to circumvent Indian laws.
The investigation by the outlet also revealed that Amazon had been providing these sellers with discounted fees for years.
According to the investigation, approximately 35 of Amazon’s more than 400,000 sellers in India accounted for roughly two-thirds of sales on its India website in 2019.
Two sellers, Cloudtail and Appario, accounted for 35% of the platform’s sales.
Last year, India’s Supreme Court ruled that Amazon and Walmart-owned Flipkart must face antitrust investigations in the country.
The Indian competition watchdog, the Competition Commission of India, launched an investigation into the firms in 2020 for allegedly promoting select sellers (those in which they own a stake) on their e-commerce platforms and engaging in anti-competitive business practices.
Long-standing Indian laws prohibit Amazon and other e-commerce companies from holding inventory or selling directly to consumers.
To avoid this, firms have formed a web of joint ventures with local companies that act as inventory-holding companies.
In late 2018, India closed this loophole, which was widely regarded as the country’s biggest blowback to the American firm at the time.
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Amazon and Walmart-owned Flipkart scrambled to remove hundreds of thousands of items from their stores and shifted their investments in affiliated firms to a much more indirect route.
A group of new sellers run by former executives of Cloudtail and Appario have mushroomed in the country and are listed on the Amazon marketplace, according to a scathing report published in August by Indian newspaper The Economic Times.
