Amazon will close its food delivery business in India by the end of the year, the retailer said Friday, exiting 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 parts of Bangalore. The company later expanded the service across the city, partnering with additional restaurants, but never heavily promoted or marketed the platform.
âCustomers have been telling us for some time that they would like to order prepared meals on Amazon in addition to buying all the other essentials. This is particularly relevant in current times as they stay at home safely,â the company said at the time of Food’s launch.
India’s food delivery market is estimated to be worth $20 billion in three years, according to Sanford C. Bernstein. Publicly traded Zomato currently holds a slim edge in the market against rival Swiggy, backed by SoftBank, Prosus Ventures and Invesco.
Amazon said Friday: âWe don’t make these decisions lightly. We are phasing out these programs to serve current customers and partners and are supporting our affected employees during this transition. Amazon remains focused on providing our growing customer base with the best online shopping experience with the largest selection of products at a great and convenient price.â
The announcement is part of a broader restructuring of Amazon in India. Earlier this week, it announced that it will close its edtech services Academy in the country next year.
India is a key foreign market for Amazon, which has invested more than $6.5 billion in its local business in the country. But the company lags behind Walmart’s Flipkart and is struggling to break into smaller cities and towns in India, according to a recent report by Sanford C. Bernstein.
Amazon’s gross merchandise value in the country in 2021 was between $18 billion and $20 billion, below Flipkart’s $23 billion, analysts said in a report to clients.
