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Amazon India has received interim approval from the National Company Law Tribunal (NCLT) to merge its logistics arm, Amazon Transportation Services (ATS), with its marketplace business, Amazon Seller Services. The decision is aimed at simplifying compliance, streamlining operations, and improving use of infrastructure and resources. ATS, which was launched in 2013, gets over 95% of its business from Amazon and recently started serving third-party clients. The merger aligns with Amazon's global strategy of integrating business verticals for better efficiency. Rival firms like Flipkart and Meesho are also strengthening their logistics capabilities, highlighting the importance of end-to-end control in e-commerce.
Amazon India has initiated the process of merging its logistics unit, Amazon Transportation Services (ATS), with Amazon Seller Services, the entity that runs its e-commerce marketplace in India. The company has already received interim approval from the National Company Law Tribunal (NCLT) and submitted the merger documents to the Registrar of Companies. Advertisement
According to Amazon, the goal is to reduce regulatory and legal complexities while enabling better infrastructure sharing between the two businesses. The consolidation is expected to help Amazon streamline its operations and simplify compliance in the Indian market.
ATS was launched in 2013 to handle Amazon's delivery operations internally. It now derives over 95% of its revenue from Amazon, although it has started expanding services to third-party clients as of 2023. Last year, ATS served more external clients, indicating Amazon's interest in monetizing its logistics network beyond its marketplace.
This move comes at a time when other Indian e-commerce players are also strengthening their logistics arms. Flipkart operates Ekart Logistics, while Meesho recently introduced Valmo, a tech platform for logistics aggregation aimed at its seller base.
According to recent financials, ATS saw a 7.6% rise in operating revenue to INR 4,889 crore in FY24, up from INR 4,543 crore the previous year. However, its net loss also widened by 6.9% to INR 80 crore. On the other hand, Amazon Seller Services saw revenue increase to INR 25,406 crore in FY24, growing 14%, compared to just 3% growth in FY23.
With this merger, Amazon is expected to boost efficiencies, reduce redundancy in operations, and improve scalability for both B2C and B2B logistics solutions. The integration is also likely to aid Amazon in navigating India's increasingly complex digital commerce regulations more smoothly.
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