Amazon Transportation Services (ATS), the American ecommerce giant’s Indian logistics arm, is merging with Amazon Seller Services, the primary marketplace entity in India, according to a board approval document filed by the latter with the Registrar of Companies (RoC) and accessed by ET.
The National Company Law Tribunal (NCLT) has granted interim clearance for the merger. According to Amazon’s filings with the NCLT, the merger is being conducted to reduce legal and regulatory compliance requirements and better manage the infrastructure and other resources of the two companies.
Responding to queries from ET, Amazon said, “Like most multinational companies, Amazon has a number of subsidiaries around the world, and we regularly evaluate our organisational structure. The purpose of this transaction is to simplify our organisational structure.”
ATS was set up in 2013 as an in-house logistics arm for the e-commerce marketplace and derives over 95% of its revenue from Amazon. In 2023, the company opened its logistics services to third-party clients as well.
Amazon’s rival Flipkart also has an in-house logistics company, Ekart Logistics, while SoftBank-backed Meesho last year launched Valmo, its in-house logistics software platform, which aggregates logistics service providers for its sellers.
For fiscal year 2024, ATS reported a 7.6% increase in operating revenue to Rs 4,889 crore from Rs 4,543 crore a year earlier. The company’s net loss narrowed by 6.9% to Rs 80 crore, from Rs 86 crore in FY23.
Amazon Seller Services, meanwhile, had reported Rs 25,406 crore in operating revenue during FY24, growing 14% as against just 3% in FY23. In calendar year 2024, growth in India’s e-tail market slowed 10-12% from over 20% in previous years, as per a Bain & Company and Flipkart report.
During fiscal years 2022 and 2023, ATS received a total capital infusion of Rs 1,140 crore across multiple tranches, of which Rs 400 crore came in FY23. However, the company’s global parent has not made any fresh funding infusion since January 2023.
Besides ATS and Amazon Seller Services, the US-based company operates Amazon Pay, its fintech business, through a separate entity, and Amazon Wholesale.
India’s e-commerce regulations, which allow foreign-owned companies to operate in the online retail space only on a marketplace model, also stipulate that any services provided by these platforms to sellers, including warehousing, logistics, or fulfilment, are done in a fair manner, on an arm’s length basis.
In the case of Amazon, legal experts said that any impact of the existing ecommerce rules is unclear given that the US-based parent already owns 99% of both ATS as well as Amazon Seller Services.
“The 2018 press note (pertaining to FDI rules on ecommerce) said that the marketplace entity cannot hold a direct or indirect stake in any of its sellers or service providers,” said a Delhi-based lawyer. “This was done to reduce the influence of the marketplace on the level-playing field. Any services that the marketplace provides have to be on an arm’s length basis.”
Amazon is reportedly looking to spin off its India business for a potential public listing here. Sources say that the move to merge ATS into Amazon Seller Services is unrelated to this.
Walmart-owned Flipkart, which is currently domiciled in Singapore, has begun the process of flipping to India ahead of its planned initial public offering in 2026.
The National Company Law Tribunal (NCLT) has granted interim clearance for the merger. According to Amazon’s filings with the NCLT, the merger is being conducted to reduce legal and regulatory compliance requirements and better manage the infrastructure and other resources of the two companies.
Responding to queries from ET, Amazon said, “Like most multinational companies, Amazon has a number of subsidiaries around the world, and we regularly evaluate our organisational structure. The purpose of this transaction is to simplify our organisational structure.”
ATS was set up in 2013 as an in-house logistics arm for the e-commerce marketplace and derives over 95% of its revenue from Amazon. In 2023, the company opened its logistics services to third-party clients as well.
Amazon’s rival Flipkart also has an in-house logistics company, Ekart Logistics, while SoftBank-backed Meesho last year launched Valmo, its in-house logistics software platform, which aggregates logistics service providers for its sellers.
For fiscal year 2024, ATS reported a 7.6% increase in operating revenue to Rs 4,889 crore from Rs 4,543 crore a year earlier. The company’s net loss narrowed by 6.9% to Rs 80 crore, from Rs 86 crore in FY23.
Amazon Seller Services, meanwhile, had reported Rs 25,406 crore in operating revenue during FY24, growing 14% as against just 3% in FY23. In calendar year 2024, growth in India’s e-tail market slowed 10-12% from over 20% in previous years, as per a Bain & Company and Flipkart report.
During fiscal years 2022 and 2023, ATS received a total capital infusion of Rs 1,140 crore across multiple tranches, of which Rs 400 crore came in FY23. However, the company’s global parent has not made any fresh funding infusion since January 2023.
Besides ATS and Amazon Seller Services, the US-based company operates Amazon Pay, its fintech business, through a separate entity, and Amazon Wholesale.
India’s e-commerce regulations, which allow foreign-owned companies to operate in the online retail space only on a marketplace model, also stipulate that any services provided by these platforms to sellers, including warehousing, logistics, or fulfilment, are done in a fair manner, on an arm’s length basis.
In the case of Amazon, legal experts said that any impact of the existing ecommerce rules is unclear given that the US-based parent already owns 99% of both ATS as well as Amazon Seller Services.
“The 2018 press note (pertaining to FDI rules on ecommerce) said that the marketplace entity cannot hold a direct or indirect stake in any of its sellers or service providers,” said a Delhi-based lawyer. “This was done to reduce the influence of the marketplace on the level-playing field. Any services that the marketplace provides have to be on an arm’s length basis.”
Amazon is reportedly looking to spin off its India business for a potential public listing here. Sources say that the move to merge ATS into Amazon Seller Services is unrelated to this.
Walmart-owned Flipkart, which is currently domiciled in Singapore, has begun the process of flipping to India ahead of its planned initial public offering in 2026.
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