Bengaluru: The joint venture between Jeff Bezos's Amazon and Indian billionaire and Infosys' co-founder Narayana Murthy will reportedly end their operations from mid-2022 as the e-retail giant is facing an anti-trust probe into the alleged violation of market practices.
Since its coming into existence seven years ago, Prione Business Services Pvt has been helping merchants sell their products online and making them dominant market players. The partners are reported to have mutually agreed to discontinue their JV after the current term contract.
The platform has reportedly been instrumental in giving digital business opportunities to over 300,000 sellers and entrepreneurs and about 4 million merchants have been equipped with digital payment capabilities.
The continued demand from the country's offline retailers into market grabbing tricks practiced by online giants like Amazon and Flipkart, the Competition Commission of India began a probe last year that has found merit in offline players' complaint against online-retailers that they are indulging in the business practices that are against the country's spirit.
Last week, the Supreme Court also came down heavily on Amazon and Flipkart for their attempt to halt the probe against them, and this might have mounted pressure on partners of Prione Business Services Pvt to cease their further business operations which is predicted to accelerate the country's online business market to $1 trillion.
The idea of Prione when it was established in 2014 with stake shares of 49% to Amazon and 51% to Catamaran Ventures holding, was to introduce the digital platform to local merchants for direct selling of their products and helped them in showcasing their products with detailed descriptions and eye-catching designs, giving customers opportunity self-understanding the products on sale.
What went wrong over the year during local merchants and independent shops was that the direct beneficiaries of the platform have been offended on the setting up of a fully-owned unit called Cloudtail by Prione that sold goods online alongside the independent shops. Cloudtail was reported to have sold over a third of goods of premium brands on the basis of collaborative agreements because of which local vendors felt they were pushed back, giving special treatment to premium brands.
India introduced new regulations later with the intention of curbing online platforms and barring them from selling products of their affiliates giving them special treatment. Cloudtail now sells under a fourth of all goods sold by Amazon. Both the companies have insisted that they are fully compliant with the law.