Amazon Delivers a Power Move: Logistics and Marketplace Unite in India for Turbocharged Operations

Amazon has announced the merger of its Indian logistics arm, Amazon Transportation Services (ATS), with its primary marketplace entity, Amazon Seller Services, in a strategic move to streamline operations across its India business. The board of Amazon India has approved the proposal, and the National Company Law Tribunal (NCLT) has granted interim clearance for the merger.

 

The merger, as per filings with the regulators, is also expected to lower legal and regulatory compliance costs and allow for better resource management and infrastructure for the two companies. Amazon also went on to say that the merger would also enhance the financial position of the merged company, with it being able to invest more in its business.

 

ATS, established in 2013 as an in-house logistics provider for Amazon’s marketplace, generates more than 95% of its revenue from Amazon but has recently expanded to serve third-party clients. For FY24, ATS reported a 7.6% increase in operating revenue to ₹4,889 crore, while Amazon Seller Services posted ₹25,406 crore in operating revenue, up 14% from the previous year.

 

An Amazon India spokesperson commented, “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.”

 

Consolidation refers to Amazon rivals Flipkart and Meesho both having their own logistics facilities and looking to make possible public offerings in India. Sources do, however, validate that Amazon does not have any IPO plans in the country at present.

 

Source: The Economic Times