Amazon to shut down food delivery business in India

Amazon to shut down food delivery business in India

Amazon will shut down its food delivery business in India by the end of the year, the retailer said Friday, retreating from a $20 billion vertical it entered less than three years ago.

The retailer will shut down the food delivery business, called Amazon Food, on December 29 in India. It launched Food in India in May 2020 in Bengaluru. It later expanded the service to other parts of Bengaluru, partnering with more restaurants, but never heavily promoted the platform.

“Customers tell us for a while that they want to order prepared meals from Amazon, in addition to all other essentials. This is especially relevant in these times, as they stay home safely,” the company stated at the Food launch.

India’s food delivery market is estimated to be worth $20 billion in three years, according to Sanford C. Bernstein. Zomato, which is publicly traded, holds a slight lead over Swiggy. This market is backed by SoftBank and Prosus Ventures, as well as Invesco.

Amazon stated Friday that they don’t take these decisions lightly. These programs will be discontinued in phases to protect our current customers and partners. We will also support our employees affected by this transition. Amazon is committed to providing the best online shopping experience for our customers, with the largest selection of products at the best price and convenience .

This announcement is part Amazon’s larger restructuring in India. It had earlier announced that it would close down its edtech service Academy within the country next year.

India is a key overseas market for Amazon, which has deployed over $6.5 billion in its local business in the country. But the company is lagging Walmart’s Flipkart and struggling to make inroads in smaller Indian cities and towns, according to a recent report by Sanford C. Bernstein.

Amazon’s 2021 gross merchandise value in the country stood between $18 billion to $20 billion, lagging Flipkart’s $23 billion, the analysts said in a report to clients.

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