Amazon announced on Friday it would close its food delivery business in India by the end of the year, exiting a $20 billion vertical it entered less than three years ago.
The retailer will shut down its food delivery business called Amazon Food on December 29th in India. We launched Food in India in May 2020 in a part of Bangalore. The company has since expanded its service across the city and partnered with additional restaurants, but has never extensively promoted or marketed its platform.
“Customers have been telling us all along that they want to order pre-cooked meals from Amazon in addition to shopping for all their other essentials. It’s important,” the company said at the launch of the food.
According to Sanford C. Bernstein, the Indian food delivery market is estimated to be worth $20 billion over three years. His publicly traded Zomato currently maintains a slight market lead over rival his Swiggy, which is backed by SoftBank, Prosus Ventures and Invesco.
Amazon said on Friday: These programs are being phased out to protect our current customers and partners, and to support affected employees during this transition. Amazon remains focused on providing the best online shopping experience for our ever-expanding customer base, with the largest selection, great value and convenience. ”
The announcement is part of Amazon’s broader restructuring in India. Earlier this week, the company announced that it would close its educational technology service, the Academy, in the country next year.
India is an important overseas market for Amazon, with over $6.5 billion in local business in the country. However, according to a recent report by Sanford C. Bernstein, the company has lagged behind his Flipkart at Walmart and is struggling to expand into smaller cities and towns in India.
Amazon’s gross merchandise value in the country in 2021 will be between $18 billion and $20 billion, trailing Flipkart’s $23 billion, analysts said in a note to clients.