After tasting profitability in FY17, Amazon’s Cloudtail incurs loss in FY18

Cloudtail

Amazon largest seller Cloudtail, which was in limelight for being profitable in FY17, has registered Rs 4.1 crore loss in the fiscal year ending on March 2018. However, the joint venture between Amazon and NR Narayana Murthy’s family office Catamaran Ventures, has maintained its growth chart in terms of revenue in FY18.

According to a document sourced by paper.vc, the company has posted a 27 per cent increase in revenue to Rs 7,149 crore in FY18 from Rs 5,631 crore (Rs 5706.2 crore by earlier sources) in the preceding fiscal.

The company mentioned a profit of Rs 1.59 crore in FY17. It was the first instance of tasting profitability for the Delhi-based entity after a Rs 30 crore loss in FY16.

Cloudtail has incurred the expense of about Rs 7,158 crore in FY18. The increase in expenses essentially highlight the fact that Cloudtail is betting on growth not profitability.

The firm has been facing several accusations by smaller sellers and industry bodies like CAIT and AIOVA over nepotism and predatory pricing through heavy discounts. Currently, some related cases are being heard by CCI.

To verify the claim of aforementioned bodies, Ministry of Corporate Affairs (MCA) had recently constituted a 10 members panel for checking practice of deep discounting by e-commerce companies.

Meanwhile, for attracting new merchants and retaining existing ones Amazon also slashed seller fees and reduced storage charges.

Recently, Appario–another seller of Amazon had recorded a total income of Rs 759 crore in FY18. It revealed Rs 767 crore as expenditure and Rs 7 crore loss in the same period.

Appario is a joint venture between Amazon and Frontizo Business Services, owned by Ashok Patni of software services company Patni Computers.

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