Amazon failed to compete with Swiggy, Zomato in India: Shutting down its food delivery business

Amazon Food is shutting down in India, leaving the market for Swiggy and Zomato to conquer. Barely a year ago Amazon claimed that its food delivery business in India was growing at a commendable rate.

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Amazon Food is shutting down in India. This news comes as a surprise given that Amazon’s food delivery service has been operational in the country for a little over two years now. In January 2020, the e-commerce giant started testing its food delivery service on the prime accounts of its few employees. Many industry analysts claimed that it would end the duopoly of Swiggy and Zomato in the online food delivery market in India. However, Amazon Food failed to lure Indian consumers.

As part of our annual operating planning review process, we have made the decision to discontinue Amazon Food,” a company spokesperson told Reuters.

Amazon Food Shuts Down in India

The news of the Amazon Food delivery service shutdown comes just one day after the company announced the closure of its online learning platform for high school students in the country. The Amazon Academy platform was launched in early 2021 in India, amid a surge in virtual learning during the COVID-19 pandemic.

In the second week of this month, it was reported that Amazon also intended to let go of about 10,000 global employees in corporate and technical roles. This would be the largest job cut in the company’s history. However, the company didn’t make any official announcements.

Going forward, the company will focus only on its primary businesses such as e-commerce, and cloud computing (AWS).

India food delivery market

The food delivery market is one of the fastest growing businesses in India, thanks to the increasing adoption of smartphones, the deep penetration of the Internet, higher than ever buying power of Indian consumers and the Covid-19 pandemic.

The online food delivery market in India was valued at Rs 410.97 billion in 2021. The market is projected to reach Rs 1,845.76 billion by the end of 2027, growing at a CAGR of 30% between 2022 and 2027.

Swiggy and Zomato, the two leading food delivery unicorn startups in India, continue to strengthen their market presence by adding more cities to their delivery network.

Amazon Food will shut down its operations completely on December 29, 2022.

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