Amazon said Friday that it will close its food delivery business in India by the end of the year, exiting a $20 billion vertical that it entered less than three years ago.
Amazon Food, the retailer’s food delivery service in India, will close on December 29. It will launch Food in India in parts of Bengaluru in May 2020. The company later expanded the service across the city, partnering with additional restaurants, but the platform was never heavily promoted or marketed.
“For a long time, customers have told us they would like to order prepared meals on Amazon besides other necessities.” This is especially important in these times as they stay at home safe,” the company stated at the time of the Food launch.
According to Sanford C. Bernstein, India’s food delivery market will be worth $20 billion in three years. Zomato, which is publicly traded, currently holds a small market lead over rival Swiggy, which is backed by SoftBank, Prosus Ventures, and Invesco.
“We don’t take these decisions lightly,” Amazon said Friday. We are discontinuing these programs gradually in order to care for our current customers and partners, and we are helping affected employees during this transition. Amazon remains committed to providing the best online shopping experience for our growing customer base, with the largest selection of products at the best value and convenience.”
Amazon’s announcement is part of a larger restructuring in India. It announced this week that it will close its Academy edtech service in the country next year.
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Amazon has invested over $6.5 billion in its local business in India, making it a key overseas market for the company. According to a recent Sanford C. Bernstein report, the company is trailing Walmart’s Flipkart and struggling to make inroads into smaller Indian cities and towns.
According to analysts, Amazon’s 2021 gross merchandise value in the country will be between $18 billion and $20 billion, trailing Flipkart’s $23 billion.
