Cloudtail reports 27% revenue growth in FY18; crosses $1 bn revenue mark

Cloudtail India Pvt. Ltd., a joint venture between US online retail giant Amazon and N R Narayana Murthy’s Catamaran Ventures, posted a 27 per cent growth in revenue to Rs 71.5 billion for the year that ended March 31, 2018.

While revenues continued to rise, Cloudtail slid back into the red in the last fiscal as it posted a Rs 41 million loss as compared to a Rs 15.9 million profit in FY17, according to documents filed with the Registrar of Companies (RoC) which were sourced from business intelligence platform Paper.vc.

Taking into account the US Dollar to Indian Rupee conversion rate of Rs 65.07 at the end of the previous fiscal, it’s the first time that Cloudtail has posted a $1 billion-plus revenue. Moreover, the loss posted by the company during the fiscal was marginal in proportion to its revenue.

While e-commerce marketplaces in India are not allowed by law to have a single seller account for more than 25 per cent of sales by value, Amazon’s growth in the country has given enough leeway for Cloudtail to grow its sales as well. The seller which is exclusive to Amazon is still considered to be the largest on the online platform.

Cloudtail’s growth comes on the back of Amazon continually stepping up its investments in its India business. The US giant is close to exhausting its $5.5 billion commitment to grow in the country and there doesn’t seem to be a sign suggesting that investments will slow down anytime soon.

With Walmart now becoming the largest shareholder in Flipkart, the stakes for dominance in India’s fast-growing e-commerce space are even higher. Amit Agarwal, the head of Amazon’s India business has for long maintained that the company will invest what is required and will not hold itself back based on any previous commitments.

Amazon is also looking to make additional investments in offline retail in India as it looks at a wholesome piece of India’s retail pie. After picking up 5 per cent stake in Shoppers Stop for Rs 1.8 billion last year, the company along with PE investor Samara capital acquired Aditya Birla’s supermarket chain More for Rs 42 billion.

Business Standard on Saturday reported that Amazon is also said to have made a $400 million bid to acquire a stake in grocery retail chain, Spencer’s for a minority stake. However, gauging the US giant’s move to create a strategic foothold in offline retail, rival Alibaba too is said to be bidding for a piece of Spencer’s.