Appario Retail, which is housed under Frontizo Business, a joint venture between Amazon and Patni group, also reported that profit shot up 53% to over Rs 82 crore during fiscal year 2022.
The numbers, stemming from the large chunk of order volumes it enjoys on Amazon India, reveal Appario Retail’s scale on the marketplace. The subsidiary’s main revenue source is sale of goods on the marketplace. Appario’s parent Frontizo Business, which offers customer support services to Amazon India, had a standalone operating revenue of close to Rs 55 crore in FY22 along with a maiden profit of Rs 5.6 crore, the regulatory documents showed.
On October 31, in a joint statement, Amazon and the Patni group said the joint venture has been renewed but Appario will cease to be a seller on both Amazon India and Amazon India Business — the wholesale platform — within a year.
ET had reported that the Amazon-Patni JV for Frontizo has been renewed for three years
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Existing norms do not allow an entity running an online marketplace and its group companies to own equity in any of the sellers on the platform or to have control over their inventory.
This is the second time Amazon will be shutting one of the largest sellers in the India marketplace in which it held a stake. Following the tightening of FDI rules in ecommerce, Amazon was forced to reduce its holding in the parent entities of Cloudtail and Appario Retail from 49% to 24%.
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Amazon acquired 100% in Cloudtail parent Prione earlier this year, following which it shut Cloudtail.
Appario Retail’s biggest expense was on buying inventory, spending Rs 14,470.90 crore during the period under review as against Rs 13,670.60 crore a year ago. Employee expenses fell around 30% to nearly Rs 41 crore in FY22.
Amazon set up the Frontizo JV with the Patni group in 2017. Appario Retail has scaled up as a seller on the Amazon India marketplace since then and emerged as one of the largest sellers, dealing in categories from electronics to accessories and working with brands such as Xiaomi, Noise and Fire-Boltt.
While Frontizo will continue its services, Appario Retail may offer seller onboarding services on Amazon India, ET had reported. This is similar to Prione’s core business.
Before shutting operations as a seller, Appario Retail is likely to transfer its key businesses to other seller firms on Amazon India.
ET reported in August that multiple new seller firms have taken over Cloudtail’s business on Amazon, and they have a common link — they are all run by former executives of Cloudtail and Appario Retail.
ET had reported in September that Cloudtail had clocked a 15% jump in revenue to Rs 19,076 crore, while its losses widened 2.8 times to Rs 522 crore in FY22.
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