Amazon is investing to strengthen its partnerships in India. According to the recent government norms, a single entity cannot account for more than 25 percent of sales on the e-commerce marketplace. Thus, Amazon is investing in the retailing entity so that it can have control on the company’s operations.
In line with that, the firm had created Appario Retail Pvt. Ltd. Appario is a subsidiary of Frontizo Business Services Pvt. Ltd., the JV between Amazon and Ashok Patni, who is one of the co-founders of Patni Computer Systems.
Now, according to the latest reports, the retailing firm has received around Rs 140 crore investment. The funds seems to have been transferred in two tranches — Rs 40 crores in August and the remaining Rs 100 crores in November
This was revealed through the documents filed by the company with the Registrar of Companies. However, none of the company involved have given official confirmation on this development.
Appario Retail is basically involved in wholesale and retail commerce and acting as resellers, distributors and stockists for goods, services and merchandise.
Interestingly, Amazon also has another such joint venture — Cloudtail, one of the leading seller on Amazon India. This firm’s other partner is Catamaran Ventures, which is an investment arm floated by Narayana Murthy of Infosys.
Such joint ventures for retailer enables Amazon to have better control over inventories as well as is able to achieve better margins, besides being compliant with the regulations as mentioned earlier.
Amazon, which launched its Amazon Prime subscription service, reportedly has over 11 million subscribers. The company has also entered into the hyperlocal delivery space. Currently, Amazon India is competing against the homegrown eCommerce marketplace Flipkart for the pole position in the eCommerce market.