With global economic slowdown forcing even the biggest of tech companies to cut costs, Amazon isn’t isolated. While it announced mass layoffs earlier this month, the ecommerce behemoth is now looking to shut down or seriously curtain operations of non-viable businesses. Among them, is its Indian food delivery business, which is reportedly under the axe, soon after it shut down its ‘Amazon Academy’ edtech service in India. Last week, the Seattle-headquartered tech giant told its Indian restaurant partners that it would be pulling down the shutters on its food delivery business in the country, reports TechCrunch.
Amazon Food – Amazon’s offering in the food delivery vertical in India – will be shut down on December 29, less than three years after it was launched in the Indian city of Bengaluru with several restaurants. According to a company spokesperson, the decision to discontinue the service as part of its annual operating planning review process.
“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 spokesperson added.
With the discontinuation of the service, restaurants will no longer get orders from customers via Amazon Food once December 29 is gone. Amazon added that it remains dedicated to India and would continue to drive investments in verticals such as smartphones and electronic goods, fashion and lifestyle, and B2B solutions such as Amazon Business.
Amazon also informed in the communication to its restaurant partners that it expected them “to continue fulfilling” the orders they get until then, as well as meet all its payments and other contractual obligations. Additionally, restaurants will have access to all Amazon tools and reports till January 31, 2023, and the e-commerce behemoth will provide them with support till March 31 for issues related to compliance.
India remains one of the key markets of Amazon, and the tech company has spent billions to increase its market share and strengthen its foothold in the South-Asian market. However, a recent report by brokerage firm Bernstein shows that despite making hefty investments in the country – which amount to $6.5 billion in the past eight years – Amazon has failed to become profitable in the country. Its 2021 gross merchandise value (GMV) in the country last year amounted to $18-$20 billion.
The Indian food delivery market – which is slated to be worth $20 billion in three years – continues to be dominated by the likes of Swiggy and Zomato, and is another vertical where Amazon failed to develop a strong presence. The tech behemoth continues to restructure its operations and shut down businesses – such as Academy and Food – amidst a macroeconomic environment that necessitates companies to lay off thousands of workers in a bid to be profitable.