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Modi not academic, likes simple & logical thinking, internal Amazon document said — Reuters

News agency claimed Amazon had a ‘secret strategy to dodge India’s regulators’, but e-commerce giant calls it ‘unsubstantiated, incomplete, and/or factually incorrect’ info.

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New Delhi: News agency Reuters has reported that e-commerce giant Amazon said in an internal document that Prime Minister Narendra Modi “is not an intellectual or an academic” but someone who is known to like “simple, logical, straight forward thinking without excessive academic jargon”.

The Reuters report, published on 17 February, cited a collection of Amazon’s internal meeting notes, PowerPoint slides, business reports and emails between 2012 and 2019 to claim that the American firm had a “secret strategy to dodge India’s regulators”.

A 2014 document cited in the investigative report showed talking points for Amazon chief Jeff Bezos’ meet with PM Modi in New Delhi in October that year. This document included an analysis of PM Modi, which said: “PM Modi is not an intellectual or an academic but believes that strong administration and governance is the key to running a successful government… He is known to like simple, logical, straight forward thinking without excessive academic jargon.”

The report went on to say that Reuters had asked Amazon for a comment on this description of Modi, and that “Amazon said it was committed to the prime minister’s vision for India’s digital economy and believes it can help by getting 10 million medium and small businesses online, among other steps”.

Other documents cited in the report showed that only a handful of sellers command a major portion of business on Amazon.

For example, in early 2019, only around 35 of the 4 lakh sellers on the platform in India accounted for approximately two-thirds of the sales. Two sellers — Cloudtail and Appario — in which Amazon has indirect stakes “accounted for around 35 per cent of the platform’s sales revenue”, the report said.

It went on to allege that “for years”, Amazon has been providing preferential treatment to only a small group of sellers, while publicly misrepresenting its ties with sellers and using those misrepresented ties to “circumvent increasingly tough regulatory restrictions” in India.

ThePrint approached Amazon for a comment about the report, and a spokesperson for the company said in an emailed response: “As we have not seen the documents and Reuters has not shared their provenance with us, we cannot confirm the veracity or otherwise of the information and claims stated. However, the article appears to be based on unsubstantiated, incomplete, and/or factually incorrect information, likely supplied (maliciously) with the intention of creating sensation and discrediting Amazon.”

It added: “Amazon remains compliant with all Indian laws. In the last several years, there have been (a) number of changes in regulations governing the marketplaces and Amazon has, on each occasion taken rapid action to ensure compliance. The story therefore seems to have outdated information and does not show any non-compliance. In the meantime, we continue to focus on delivering first class service to India’s consumers, and helping India’s manufacturers and SMBs (small and midsize businesses) reach customers across India and around the world.”


Also read: How the Ambani vs Amazon spat is testing India’s attraction for foreign investors


Cloudtail and Appario

The Reuters report explained that the business model that made Amazon the largest online retailer in the world is the ability to sell directly to consumers in countries like the US. However, in India, foreign investment regulations don’t allow e-commerce firms to hold goods inventories and sell them directly to customers.

To “circumvent” this restriction, Amazon had entered into a joint venture with an entity formed by Infosys founder N.R. Narayana Murthy. The joint venture was used to set up a seller named Cloudtail, which started selling on the Amazon India platform in August 2014.

While Amazon has publicly said Cloudtail receives “the same privileges as any of the other sellers on our platform”, documents show Amazon referred to Cloudtail as “SM”, or “Special Merchant”, the report said.

A 2015 Amazon India report allegedly showed the firm aimed to make Cloudtail sales account for 40 per cent of sales on Amazon.in. “Amazon helped Cloudtail ‘acquire key relationships’ with major tech companies, including Apple, Microsoft and OnePlus,” the Reuters report said.

By March 2016, Cloudtail sales accounted for 47 per cent of sales on Amazon.in, the report quoted an internal document as saying.

However, that month, India issued new foreign investment rules that prevented a single online seller from accounting for more than 25 per cent of total sales of an online marketplace. The new rules had also said an e-commerce platform “will not exercise ownership over the inventory” sold on its site.

To deal with the new rules, Amazon said it “will need to move a subset of this selection” of smartphones from Cloudtail “to other sellers”, the Reuters report cited a May 2016 document as saying.

Amazon then moved the procurement of “some mobile phone brands” Cloudtail was offering to Amazon Wholesale, a B2B operation in India that does not come under India’s foreign investment restrictions.

Amazon Wholesale had then supplied products to “certain” sellers who sold them on Amazon.in, Reuters stated.

Amazon’s response to this, according to the report, was: “As government policies have continued to evolve, we have consistently made the necessary changes to ensure compliance at all times…The so-called facts stated here fail to show any non-compliance” with foreign investment rules.

In 2017, the report said, Amazon moved to make a second ‘special merchant’ or ‘SM2’ named Appario. For this, Amazon entered another joint venture with an entity backed by entrepreneur Ashok Patni’s family. Reuters described Patni as a “pioneer” in India’s IT outsourcing sector.

According to the report, a 2019 internal Amazon document said Cloudtail and Appario get “subsidised fees” and “access to Amazon global retail tools”.

Amazon is quoted as saying that its marketplace fees are “uniformly applicable to all like sellers”.

Amazon’s further responses to Reuters

Responding to queries from Reuters, Amazon is quoted as saying it “does not give preferential treatment to any seller on its marketplace” and “has always complied with the law”.

“The reporting appears based on unsubstantiated, incomplete, and/or factually incorrect information, likely supplied (maliciously) with the intention of creating sensation and discrediting Amazon.”

The e-commerce firm added that it “treats all sellers in a fair, transparent, and non-discriminatory manner, with each seller responsible for independently determining prices and managing their inventory”.


Also read: ED initiates probe against Amazon over ‘violation’ of foreign exchange law


 

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18 COMMENTS

  1. What better could be expected from those here who are Italian cheerleaders. Please ask Rahul Vinci to be smart enough first. And btw, being simple, logical and straightforward is the sign of a great statesman and hence PM Modi is a global leader. Respect it because India chose him twice. And Ambani is an Indian businessman… Rahul targets him because he gets money from China to promote Alibaba and Amazon.

  2. yup , amazon has cloudtail , appario , rocket kommerce llc and a new brand named solimo which sells anything and everything.. amazon is the real atanirbhar . to be fair , flipkart also has “RetailNet” . but i cant find any flaws in this, sellers in india act like isse 2 rs mill raha to kama lo instead that i’ll sell it for 1.5 but earn it on volume of orders. gadhe hai saare, jaake ek cheez lo mrp ke neeche jindagi mein nahi bolte aur reliance to itne bade bade stores rakhne ke baad bhi apne products pe 1-2 rs deta hai..tome , it doesnt matter who is making money from this , amazon can sell it for cheap , indians can buy it cheap and govt. gets taxes and jobs..end of story..indian sellers just cant compete with the price that amazon offers and using this as an excuse to bring amazon down.

  3. “He is known to like simple, logical, straight forward thinking without excessive academic jargon.”

    Amazon has got it only partially right. He is an ‘unpad’, so no academic jargon.

    But the logical thinking is only for wickedness. Otherwise, you would not do things like demonetisation ( a scam), CAA-NRC, deal with farmers to benefit two cronies, and seek to thrive on polarisation.

    India runs on crony capitalism and blockage of competition. Burning down your neighbour’s shop in a riot is seen as knocking out competition, and is a way of life that is encouraged.

    Ambani + Zuckerberg combo is more favourable for Modi than Murthy and Bezos. The first involves a corrupt Gujarati, who is on Modi’s wavelength. The Ambani + Zuckerberg combo will demand blockage of competition, Modi will oblige. Amazon might find itself in the same way as Vodafone.

  4. What relations logic has with modi Amazon may praise him lot but his first relationship will be with Ambani rather than logic not for nothing he spared time to welcome his new born master the grandson of Mukesh.

    • Welcomes his newborn SERVANT dear. Modi is always the master though people of servile mentality who worships money cannot understand it.

  5. Reuters academic degree certificate needs to be transparent, many people are waiting to appear examination for this certificate.

  6. And what does it havr to say about Rahul Vinci ? Did any reporter find any internal report about the intellect of rahul?

    • Mr Gaanesh: The man who is in power is Modi, not Rahul Gandhi. And therefore, questions will be asked about the former’s competencies – or lack thereof. More so given the fact that under the leadership of this RSS man, India has lost territory to China, been overtaken in economic growth by even Bangladesh and a lot of his Gujarati backers seem to get very rich.

      I find it mind-boggling that lathi wielding shaka fellows like you are not concerned about your current leader but about some hypothetical leader who anyway has been written off.

  7. Yes it should be thoroughly investigated Cloudtail or appario are flooded at Amazon offering everything. Recently bought around 25 different products it was either being sold by Cloudtail or by Appario. Recently another new Entrant offering everything is BENEDICTION. Why these only…..
    Something fishy is cooking up at Amazon.
    Authorities should now investigate.

  8. when someone(modi) does not have brain they dont talk about because they know thry would be ashamed. For example a nantional level cricketer would never represent a national football team because it is out of his league.

    • Seems you dropped your brain while reading the article. What could be expected from those who are Italian cheerleaders. Please ask Rahul Vinci to be smart enough first. And btw, being simple, logical and straightforward is the sign of a great statesman and hence PM Modi is a global leader. Respect it because India chose him twice.

  9. Simple straightforward thinking, and extreme Street smartness are the hallmarks of the successful Indian politicians. Their carefully cultivated rustic image conceals razor sharp minds that business school graduates and academic types can’t match.

  10. Looks like reliance and it’s partners Google fb etc want to remove Amazon from business as they hav put a case against future deal

  11. Being simple, logical and straight forward is the best way to connect with Indian masses. Modi is not only simple, logical, straight forward but also a visionary. Modi’s vision is not mere academic but grounded in his deep belief in the capability of Indians. Being the leader, he is best suited to inspire people to aim higher and deliver their best. Not being academic is not a handicap for Modi but a blessing to the poor of India.

  12. “He is known to like simple, logical, straight forward thinking without excessive academic jargon.”
    Even Albert Einstein was described similarly.

  13. The report by Reuters is 100% correct.Amazon is a big liar and has consistently screwed sellers in India by its policies.

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