Amazon To Shut Food Delivery Business Next Month In India

Amazon announced that it would shut down its food delivery business ‘Amazon Food’ in the country along with its edtech vertical ‘Amazon Academy’ on Friday.

Amazon has informed its franchisees in India that it will stop operating its food delivery service as of December 29. The service was launched by Amazon in May 2020. 

The e-commerce giant shut down its nascent edtech division in the nation the day prior, and the corporation now plans to fire thousands of employees worldwide.

“Due to this decision, orders from consumers placed through Amazon Food will no longer be delivered after this date. 

Until then, you will keep getting orders, and we anticipate you to fulfill those orders, according to an email sent by Amazon to its restaurant partners.

Restaurants have been informed by the company that it is dedicated to fulfilling all payment and other contract terms. 

Up to January 31, 2023, restaurants will get accessibility to all Amazon resources and reports. Additionally, it will offer assistance with any compliance-related problems through March 31.

The business declared that it is still committed to the Indian market and that it will make further investments in B2B services like Amazon Business as well as grocery, cellphones, and consumer goods.

According to a recent estimate by the brokerage firm Bernstein, despite spending $6.5 billion in India over the past eight years, the country’s largest e-commerce company has negative EBITDA margins of 5 to 10%, making profitability impossible.

The company also faces intense competition in quickly expanding markets like smartphones and clothing, a weaker value proposition in “new” business sectors like social commerce & quick commerce, limited growth in tier II and III cities, and a regulatory environment that is unfavorable to foreign retailers.

The Seattle-based corporation, which has been slashing costs in a number of sectors of its business over the last few months, is going through an annual assessment process to determine where it can save additional money in light of the potential for a worldwide downturn. 

According to Amazon CEO Andy Jassy, this year’s evaluation is “more tough” as a result of the current economic climate and the company’s recent rapid hiring.

Amid worries about an economic slowdown, other technology companies, many of which had gone on hiring sprees in the previous few years, have also begun reducing their personnel. 

Facebook’s parent company Meta, among others, announced this week that it will fire 11,000 employees, or around 13 percent of its staff. Additionally, this month, Elon Musk, the new CEO of Twitter, cut the workforce in half.