By the end of the year, Amazon will stop providing food delivery services in India, the retailer announced on Friday, exiting a $20 billion industry it only recently entered.
Amazon Food, a food delivery service run by the company, will cease operations in India on December 29. In May 2020, it began offering Food in India in several areas of Bengaluru. Later, the business partnered with more businesses to expand the service around the city, but it never actively marketed the platform.
“Customers have been telling us for some time that they would like to order prepared meals on Amazon in addition to shopping for all other essentials. This is particularly relevant in present times as they stay home safe,” At the time of the Food launch, the company stated.
Sanford C. Bernstein predicts that in three years, the Indian food delivery sector would be worth $20 billion. Zomato, which is publicly traded, presently has a slim advantage over Swiggy, a competitor sponsored by SoftBank, Prosus Ventures, and Invesco.
Amazon stated on Friday: “We don’t take these decisions lightly. We are discontinuing these programs in a phased manner to take care of current customers and partners and we are supporting our affected employees during this transition. Amazon remains focused on providing our growing customer base the best online shopping experience with the largest selection of products at great value and convenience.”
The statement is a part of a larger reorganisation effort by Amazon in India. It revealed this week that its edtech service Academy in the nation will stop operating the next year. Amazon has invested more than $6.5 billion in its local business in India, making it a significant overseas market for the company. According to a recent assessment by Sanford C. Bernstein, however, the company is falling behind Walmart’s Flipkart and finding it difficult to gain traction in smaller Indian cities and villages.