After FDI setback, Amazon to adopt wholesale trading route for sellers Cloudtail, Appario

After losing market cap worth more than $45 billion largely owing to new foreign direct investment (FDI) rules in India, US e-tailer Amazon has been mulling to make its sellers, Cloudtail and Appario, into wholesale entities trading in the B2B segment.

Both the sellers, after the conversion, will sale to third-party vendors dealing with consumers. The company's category managers reportedly have already kicked in a process to select preferred sellers.

The wholesale trading route will be a faster process, complaint with the FDI norms and Amazon will continue to enjoy the value in these two entities which are critical for growth, said ET report quoting person close to the development.

Cloudtail and Appario have informed brands that their products will be live on the marketplace soon, added the person.

Besides, US e-tailer has also brought many new sellers such as Sigma Online, A to Z Supermart and Sabharwal Super Market among others. There is no clarity over them being the potential preferred vendors.

At presently, Amazon holds 49 percent each in Cloudtail and Appario. Catamaran Ventures and the Patni Group own rest of stakes in both the sellers.

On February 1, both the sellers went off Amazon site since revised FDI rules prohibit from selling through the marketplace under the norms. The revised regulations do not allow FDI in the inventory-based model of e-commerce.

Earlier, Amazon and Flipkart demands for extension of deadline were rejected by the government.

As per an estimate, the new policy will have a big impact on marketplaces sales figures. The FDI rule is said to cost India $46 billion in the coming years, as per PwC.