Amazon has alluded to additional layoffs in the upcoming years in a recent letter to its staff. In a recent letter to his staff, Andy Jassy, the CEO of Amazon, outlined a clear vision for the company’s future.
According to the letter, there will be significant changes in the workforce as a result of the increased emphasis on artificial intelligence (AI), including possible cutbacks in corporate employment responsibilities.
Jassy underlined how AI is used throughout Amazon’s extensive operations, pointing to its use in Alexa, shopping features, and internal operations. He described generative AI as a “once-in-a-lifetime” technical development that may open up new opportunities for businesses and consumers alike.
Underlining the Potential of Generative AI
While showcasing the amazing capabilities of generative AI, Jassy pointed out that such technologies are uncommon; they only come along once in a lifetime and fundamentally alter the possibilities for consumers and companies.
As a result, Amazon is making significant investments, and its progress is clear. It is evident in the way that Amazon is introducing Alexa+, its next-generation Alexa personal assistant, which is significantly smarter and more capable and the first to be able to take important actions for users in addition to intelligently responding to almost any query.
He went on to say that tens of millions of people worldwide use Amazon’s AI shopping assistant to find new products and make better-educated decisions about what to buy.
Jassy continued by concentrating on how Amazon is using generative AI to improve the efficiency of its internal processes. He added that the business is utilising generative AI extensively in all aspects of its internal operations.
Amazon is utilising artificial intelligence (AI) in its fulfilment network to enhance demand forecasting, inventory positioning, and robot efficiency, all of which have increased delivery speed and cost to serve.
With the help of GenAI, it has redesigned its customer service chatbot, offering an even better experience than before. Additionally, it is using GenAI to create product description pages that are more intelligent and captivating.
Infusion of More AI Means Leaner Workforce-Jassy
Jassy made hints about how the workforce will be impacted by the use of AI. He mentioned that Amazon will require fewer individuals to perform certain tasks than it currently does, while a greater number of individuals will be required to perform other categories of jobs.
Although it’s difficult to predict exactly where this will end up, the company anticipates that, as it improves efficiency from implementing AI widely throughout the organisation, it will shrink its overall headcount in the coming years.
As the company undergoes this transition, Jassy advised his staff to be curious about artificial intelligence (AI), educate themselves, attend workshops and trainings, use and experiment with AI whenever possible, take part in team brainstorming sessions.
All these steps are necessary to determine how to innovate for Amazon’s customers more rapidly and extensively, and work more efficiently with more resilient teams.
The American multinational technology company, Amazon, which engages in e-commerce, cloud computing, artificial intelligence, and digital streaming, has recently announced that it is reducing some of its items. The brand is cutting down the products that sell under its brand like Amazon Basics.
This leader in the e-commerce market mentions to the Wall Street Journal, “We never seriously considered closing our private label business and we continue to invest in this area, just as our many retail competitors have done for decades and continue to do today”.
To find more, this article highlights the reason why Amazon took such a decision to reduce selling its own private-label business.
The giant e-commerce brand, Amazon started having its own brands like Pinzon, Amazon Basics, Mama Bear, Wag, Amazon elements, and more in 2009. Amazon decided to have in-house brands to boost increase margins and reduce competition, however, some of its brands are not doing well in the market for which they are reducing the items. One of its private label brand Amazon Basics is going to have less number of items to be sold.
This change in the system that Amazon is going to adopt is due to ‘weak sales’. However, they are not going to completely shut their private-label business, they will just reduce the number of items. As per some reports, Amazon has asked its team for the past six months to chop off some of its items and not to further go for reordering.
There are statements that Amazon finally came to this decision after Dave Clark, an ex-amazon executive made a review of how business is done by Amazon. Amazon claimed that Dave Clark made decisions that led to over-staffing at Amazon fulfillment centers and refrained from union progress.
Unfair Treatment of Third-Party Merchants
In 2020, the European Commission charged Amazon for using its power and data to push up its products for its benefit over other rival merchants. This was disclosed during a press conference on an anti-trust case with Amazon at the European Commission (2020) held in Brussels.
In addition to accusations, the European Commission has also opened up an investigation to look into the matter that if Amazon gives exceptional treatment to its products and to vendors who use its delivery benefits.
The controversy does not end here, as the Commission has also put up statements that Amazon has no right to use third-party’s activity and data to its benefit since they are its competitors.
The dualism act by Amazon has also drawn scrutiny issues in the USA. They had been asked to defend themselves from these allegations in writing, with which they had disagreed.
In their defense, Amazon claimed that the company has always been helpful to other merchants. The brand made several statements in its defense that they only represent 1% of the world’s retail market. Furthermore, they have also claimed the brand has supported small businesses for the past 20 years in comparison to any other retailer.
In efforts to ease the regulatory pressure, Amazon is now reducing the sale of its products. Amazon is doing all of this to resolve its two anti-trust cases issued by the European Commission.
The other case which was opened by the EU is to investigate whether the giant retailer favors those merchants that use its logistics and delivery system over other sellers.
Although as per reports, Amazon has contradicted these allegations, however, to settle down it has come to a concrete conclusion to make things transparent with the European Commission and keeping in view of their trust issues it is aiming to serve the European consumers and the 185,000 plus European small and medium-sized enterprises who are selling through their platform.
These investigations compelled Amazon a fine of up to 10% of its annual revenue worldwide.
Amazon has also made statements concerning its defence claims, that they are finding the new EU digital regulations, the Digital Markets Act completely one-sided. They have made remarks like, “unfairly targeting Amazon and a few other American companies.”
To come out of these accusations, Amazon now has taken up the step to refrain from using its competitor’s data and use it for its own purpose. The brand is now accepting to give equal status to other sellers while ranking their products with the feature, “buy box”. This feature allows shoppers the liberty to add items directly to their shopping bags.
Conclusion
This massive e-commerce performer, Amazon, is facing some difficulties right now. The company’s decision to reduce the selling of its products shows us that they plan to keep things ethical for other third-party merchants. Amazon is now looking for ways to give full access to other sellers on its marketplace.
FAQs
What is Amazon’s private label?
Amazon sells its products using its in-house brands which are its private labels. Some of the examples are Amazon Basics, Solimo, Happy Belly, and Amazon Fresh.
Is Amazon closing down its private label brands?
No, Amazon has decided to sell fewer items by its private labels due to low sales and due to anti-trust issues.
If you have ever tried to buy or sell products on Amazon, you must have come across this brand “Cloudtail India”. It used to be the largest seller on Amazon in India but has recently ceased its operation.
This joint initiative of Amazon and Catamaran Venture was shut down on 19th May 2022 leading to the end of a seven-year-long partnership between the two well-recognized organizations.
Before announcing the end of the partnership Amazon India announced a 100% acquisition of Cloudtail India. The employees earlier working for the joint venture has been given the option to continue at Amazon or take a voluntary exit.
In this blog, we will discuss everything about Cloudtail India, how it worked and why this successful partnership was brought to an end with mutual agreement between the two parties.
If you are associated with Amazon, either as a seller or a buyer, this is important for you. If you are asking “Why”, keep reading this blog till the end.
Catamaran Venture is a venture capital firm i.e. it funds the startups or other organizations that require capital. The net worth of the company is around $ 127 million. It is headed by N.r. Narayana Murthy has made investments across high-growth sectors such as technology, eCommerce, healthcare, etc.
Amazon started functioning in India in 2013. It was the time when the online market in India was least developed and Amazon had to work hard to get customers.
For this reason, in 2014, Amazon India and Catamaran Venture initiated a joint venture under the name Prione Business Services. The basic objective of this venture was to bring more small retailers and businessmen online.
This on one hand would help the retailers to expand their market and reach more customers and on the other hand, helped Amazon to earn a reputation and recognition in the country.
Prione Business Services contributed quite a lot to advancing the online market in India. It provided support systems for the retailers or merchants by helping them with issues as small as listing or describing their products on Amazon.
According to the statement, Prione enabled more than 300,000 sellers and entrepreneurs to establish their online market. Also, it helped 4 million merchants with digital payment capabilities.
However, in the same year i.e. 2014, Prione also established its very own subsidiary company in India, under the name “Cloudtail India Pvt. Ltd.” which was engaged in the B2C retail business.
Under Prione’s ownership, Cloudtail worked as an online retailer and by the end of 2020, it was selling over 30 lakh products under multiple categories such as fashion, apparel, appliances, media, consumables, etc. on Amazon.
No doubt, Cloudtail India became the largest seller on Amazon leaving its other competitors behind with a great margin.
How Did Cloudtail India Work?
At present, Amazon has over four lakh sellers and more than two crore customers registered with it.
The normal procedure for retailers to sell their products on Amazon includes registering themselves on the website. After this, the sellers list their products on the website with the price that also includes the profit share of Amazon.
Generally, this profit share lies between 5-25% depending on the product category and price. This share includes commission, fixed fees, and other similar charges.
As the seller has to earn profit by selling these products, some amount of profit share is included in the price of the product due to which the customer has to buy the product at slightly higher rates.
The price of the product further increases as the vendor also has to pay delivery charges to Amazon which start from Rs. 82/- onwards. Moreover, these sellers also have to bear the promotion charges for their product which again adds to the price of the product. Therefore, the prices at which the customer has to buy the products of these brands are quite higher in comparison to what the seller would offer without including these charges.
However, as Amazon had its own equity in Cloudtail India Pvt. Ltd. the company does not pay any commission to Amazon for listing or selling its products. There is no delivery or promotion fee included for any of the products sold by Cloudtail.
Due to this the prices of the products obviously remain quite low in comparison to its competitors. This gave Cloudtail India an edge over other retailers.
Moreover, being the parent company Amazon prioritizes the products sold by Cloudtail India by always listing them at the top of the page. This further increased the sale of products making Cloudtail India Pvt. Ltd. the biggest seller on Amazon.
As per the law, India prohibits Foreign Direct Investment (FDI) in inventory-based models for eCommerce. This means that the companies such as Amazon and Flipkart are only allowed to work as a marketplace.
These companies are only permitted to provide platforms to other sellers or merchants or businesses to enlist their products and sell them but they cannot list their own products on the platform.
Due to this legal concern, a number of objections were being raised by other retailers and merchants selling their goods on Amazon about the close partnership between Amazon and Catamaran Venture.
In this regard, the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry issued a Press Note on 26th December 2018.
This note clearly disallowed the participation of marketplaces in any type of seller activity even through any “Group companies”. This means that these platforms are not allowed to sell their own products on their platform as this would hamper the business of other small retailers.
Here, Group Company meant two or more enterprises that directly or indirectly exercise 26% of the voting rights in another enterprise or appoint more than 50% of the board members in their entity.
To abide by this law, Catamaran Ventures 2019 increased its stake in Cloudtail India from 51% to 76%. Thus, the stake of Amazon in the joint venture was reduced from earlier 49% to 24% later.
Therefore, as Amazon now had only a 24% share in the joint venture, and the law spoke about 26% or more share, Cloudtail India Pvt. Ltd. could still sell products to Amazon without violating any law.
Even after this, the small businessmen and other retailers or vendors on Amazon claimed that the parent company of Cloudtail India Pvt. Ltd., i.e. Prione Business Services was established with the intention to help small retailers and sellers to start their online businesses.
In 2019, Delhi Vyapar Mahasangh (DVM) submitted a plea with the Competition Commission of India (CCI) against Amazon and Flipkart.
In this plea, they accused these marketplaces of abusing their market dominance and preferential listing and deep discounting on products sold by selected vendors in which they control indirect stakes.
They alleged that these marketplaces were drawing indirect benefits from these brands indicating a conflict of interest. Due to this, the online market of small businesses is getting hampered as they are unable to efficiently reach their target customers.
In this regard, the Director-General of the Competition Commission of India launched an inquiry for alleged violation of Section 3 of the Competition Act, in January 2020.
To resolve this issue, Catamaran Venture and Amazon India first approached Karnataka High Court and later the honourable Supreme Court of India. However, both the courts stated that the companies should be open to such anti-trust investigations in their business practices.
In the light of this statement, as well as the changing regulatory environment and unfavourable eCommerce operating guidelines, both the companies announced the end of their seven-year-long partnership.
Is Shutting Down of Cloudtail India Good News for Retailers?
Honestly speaking, Yes. This decision will provide small businesses and other online retailers and vendors a level playing field. Strict regulatory rules were required in this field for a long time which have now been implemented.
This will also reduce the monopoly of these marketplaces to endorse a few specific brands that bring more indirect profit to them.
Overall, the small sellers will be benefitted who will now be able to sell their products in a healthy competitive environment.
Conclusion
With the partnership between Amazon and Catamaran Venture coming to an end, this is certainly an issue of concern for Amazon as it has invested around $ 1 billion in India.
Also, the customers might have to buy the products at slightly higher prices as the subsidiary brand is no longer available to provide the products at the least rates.
However, this will provide equal rights and symmetry to the small businessmen, sellers, vendors, etc. who will now have better opportunities to expand their online market.
FAQs
Is Cloudtail India owned by Amazon?
No, Cloudtail India was a joint venture with Catamaran Ventures but Amazon has purchased a 76% stake in the company and now Cloudtail is a wholly-owned subsidiary of Amazon.
Is Cloudtail India shutting down?
Yes, Cloudtail India will shut down its operations on May 1.
Who is the owner of Cloudtail India?
Prione Business Services Private Limited was the owner of Cloudtail India.
Why did Cloudtail India shut down?
As per e-commerce regulations, online marketplaces cannot own any direct stake in seller entities which is the reason Cloudtail India has to shut down its operations.
Jeff Bezos is currently the World’s Richest Man with a Net-worth of $193.2 billion as of April 2021. He is the founder & CEO of Amazon and the owner of ‘The Washington Post’. The e-commerce industry has been at the center of most entrepreneurial attempts and ventures. Significant developments have happened in this segment over the last couple of decades. The e-commerce division has become an indispensable part of our lives today. Physical obstacles related to brick-and-mortar stores have essentially been eliminated. Without any doubt, Amazon is at the pinnacle of e-retail. And the credit goes to Jeff Bezos.
Jeff Bezos Biography
Name
Jeff Bezos
Born
12 January 1964 (age 57 years)
Place
Albuquerque, New Mexico, United States
Net Worth
$193.2 Billion (April 21, 2021)
Known for
World’s Richest Man (Forbes), Founder & CEO of Amazon
Education
Princeton University (1982–1986), Miami Palmetto Senior High School, River Oaks Elementary School
Bezos graduated from Princeton University in 1986 with a degree in computer science and electrical engineering. His early interest in gadgets and the functioning of machines made him turn his parent’s garage into a laboratory. He had business instincts right from the start as during high school, he began the Dream Institute—an educational summer camp for fourth, fifth, and sixth graders.
Jeff Bezos – Key Investments
Jeff Bezos invested in various businesses to date. A look at the World’s Richest Man’s investments shows a diversified portfolio spanning across sectors including media, software technology, healthcare, financial services, logistics & more.
Take a look at the Key Investments of Jeff Bezos.
Jeff Bezos Key Investments
Jeff Bezos – Jobs Before Amazon
After graduation, Bezos worked for several firms on Wall Street. He worked for Bankers Trust and then D.E. Shaw. He was elected as the youngest vice president at D.E. Shaw in 1990. A smooth life wasn’t everything for him and he decided to try his hands on something different. In 1994, he resigned from D.E. Shaw and moved on to the e-commerce industry. He launched an online website that sold books. This marked the beginning of his entrepreneurial path.
Inspired by the great South American River Amazon, he named his online bookstore Amazon.com. The website went live after nearly 300 friends tested the beta site. Amazon.com became popular all over the world. With no promotion, Amazon.com sold books all over the country and within 30 days, the company was operating in 30 countries. Within two months, sales reached around 20,000 USD per week. This was much larger than anticipated.
Amazon Logo
The company went public in 1997. After two years, the company became the face of the e-commerce industry. The growth of Amazon.com lead to diversification in its offerings. The company began to sell CDs and videos in 1998. Later, toys, clothes, and video games were brought onto the Amazon platform. The move was done to cover every age group. While many e-commerce websites were struggling to survive, Amazon.com flourished. The yearly sales took a giant leap from 510,000 USD in 1995 to 17 billion USD in 2011.
The introduction of Amazon Prime was significant in revenue boost. The media tycoon declared that Amazon Prime had surpassed 100 million paid subscribers. The company’s value reached 1 trillion USD in the year 2018, making it the second company to break the 1 trillion mark.
Amazon.com launched its video-on-demand service in the year 2006. The extension was initially named as Amazon Unbox on TiVo. Bezos introduced Amazon Studios in 2013. The studio became popular due to its association with the critically acclaimed Transparent and Mozart in the Jungle. Bezos has also made a cameo appearance in the movie Star Trek Beyond as an alien. Under his leadership, Amazon introduced Alexa, the virtual assistant. The arrival of Kindle changed the way people read books after 2007. Bezos gave Apple’s iPad a run for its money by introducing launching Kindle Fire HD. The tablet was affordable and was well received.
Bezos made headlines after purchasing The Washington Post for 250 million USD. After taking over the company, Bezos hired hundreds of reporters and editors. Later, the association of Michael Flynn (the former national security advisor) with Russians was revealed by Washington Post. This forced Flynn to resign. At the end of 2016, the new publisher generated revenues of 100 million USD.
In 2000, Bezos founded Blue Origin. Blue Origin is an aerospace company that makes space travel affordable through cutting-edge tech. For the most part of the decade, the company wasn’t in the news, siloing itself in its research. Bezos invited many reporters to visit the company’s headquarters in Kent in 2016. He proposed a vision of humans colonizing the space. Bezos sold 1 billion USD of Amazon stock to fund Blue Origin. NASA announced that Blue Origin was amongst the 13 companies selected to collaborate on nineteen technology projects to reach the Moon and planet Mars. Blue Origin is also working with NASA on reusable rockets.
In the year 2018, Bezos launched the Bezos Day One Fund. This organization helps homeless families. It also aims at creating a network of new, non-profit tier-one preschools for low-income communities. Jeff gave away 2 billion USD of his personal fortune to fund the nonprofit organization.
For many years, Bill Gates was at the tip of our tongues when speaking of the world’s richest person. Jeff Bezos changed that. The staggering increase in his wealth shows what behemoth of a company Amazon has become. What began as an online bookstore now deals with cloud services, e-retail, electronics, high tech offerings, and what not. Jeff Bezos is an example of how consistent efforts and innovation can take an individual to unimaginable success!
Jeff Bezos – FAQs
How much does Jeff Bezos make in a day?
Jeff Bezos’s net worth increased by $67.4 billion on August 12, 2020. Based on these figures, Jeff Bezos made around $321 million per day or $3,715 per second. According to Observer, Jeff Bezos earns approximately $149,353 a minute.
What does Jeff Bezos do with his money?
Bezos’ net worth is an estimated $193.2 billion, according to Forbes. He spends his fortune on real estate, a Gulfstream Jet, and his space exploration company.
What did Jeff Bezos study in university?
Bezos had an early love of computers and studied computer science and electrical engineering at Princeton University.
Who Founded Blue Origin?
In 2000, Bezos founded Blue Origin. Blue Origin is an aerospace company that makes space travel affordable through cutting-edge tech.
Why Jeff Bezos named Amazon?
Inspired by the great South American River Amazon, Jeff Bezos named his online bookstore Amazon.com.
How was life for Jeff Bezos before Amazon?
After graduation, Bezos worked for several firms on Wall Street. He worked for Bankers Trust and then D.E. Shaw. He was elected as the youngest vice president at D.E. Shaw in 1990.
Jeff Bezos – Conclusion
Bezos founded e-commerce giant Amazon in 1994 out of his garage in Seattle. Before starting Amazon, Bezos worked for several firms on Wall Street. He worked for Bankers Trust and then vice president at D.E. Shaw. Bezos was doing well with his life at that point of time. But he wanted to try something new with his life and started working on Amazon from his garage. The life story of Jeff Bezos has admired a lot of people all over the world. “Never Settle. Keep Hustling”.
“The people who are crazy enough to think they can change the world are the ones who do.” — Steve Jobs
