Amazon India Taking Off Online Products After New eCommerce Norms Come Into Force

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Source: DIPP

As India denied extending the February 1 deadline for e-commerce FDI compliance, Amazon CFO Brian Olsavsky said this will impact consumers and sellers here. He was talking to analysts post the announcement of December quarter results. After the government announced it will not extend the deadline, Amazon reacted quickly with removing majority of its products online that were sold by sellers like Appario and Cloudtail. The products removed included Echo speakers, batteries and floor cleaners. This is as per a report in the Economic TImes.

Brian Olsavsky Source: Linkedin

Two sources with direct knowledge of the matter said the products began to disappear from the Amazon India website late on Thursday as it began complying with the revised norms before a midnight deadline. Both these firms have Amazon as a joint venture partner. Unavailability of these products and delivery timelines would impact consumers across the country.

“Our main concern is to try and minimize the impact to our customers and sellers in India. We have built our business around price selection and convenience. We don’t think the changes help in those dimensions for both customers and sellers in India. We remain committed to complying with all laws and regulations but we are evaluating the situation,” Olsavsky said on the conference call. However, he did not specify the exact scale of impact the new rules will have on Amazon’s India businesses.

Amazon’s international business reported losses of $642 million during the quarter compared to $919 million in a year ago period, down by about 30%. Amazon’s aggressive spends for the India market have been attributed as one of the reasons for Amazon’s thin margins in international business. For the same period, Amazon’s sales in the international business grew to almost $21 billion as against $18 billion a year ago.

Analysts in India tracking the space said companies like Amazon and Flipkart could see about 10% of their sales taking a hit in the short-term. A Barclays analyst note stated the growth of Amazon India could fall from 40% to 0%.

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