Amazon will close its food delivery business in India by the end of the year, the retailer said Friday, stepping back from an industry it entered less than three years ago.
The retailer will shut down its food delivery business, dubbed Amazon Food, on December 29 in India. The company launched Food in India in parts of Bengaluru in May 2020. The company later expanded service across the city and joined additional restaurants, but the platform was never heavily promoted or marketed.
“Customers have been telling us for some time that they want to order ready meals on Amazon in addition to all other necessities. This is especially relevant in today’s times as they stay safe at home,” the company said at the time of Food’s launch.
It said on Friday: “We do not take these decisions lightly. We are phasing out these programs to care for current customers and partners and we are supporting our impacted employees through this transition. Amazon remains focused on providing our growing customer base with the best online shopping experience with the widest selection of products at great price and convenience.”
The announcement is part of the company’s broader restructuring in India. Earlier this week, Amazon announced it would close its edtech service Academy in the country next year.
India is an important overseas market for Amazon, which has invested more than $6.5 billion in local commerce in the country. But the company lags behind Walmart’s Flipkart in the country and is struggling to penetrate smaller Indian cities and towns, according to a recent report by investment firm Sanford C. Bernstein.
Amazon’s gross trade value in 2021 in the country was between $18 billion and $20 billion, trailing Flipkart’s $23 billion, the analysts said in a report to clients.