According to sources, Amazon has chosen to wind down its distribution services in India after terminating its food delivery and education services. The corporation intends to focus on its main business and reduce its exposure to other industries. According to the source, in light of the economic slump, the corporation will now focus more on core activities.
Amazon Distribution employs approximately 50 individuals primarily in Bengaluru, Hubli, and Mysore. The distribution unit obtains fast-moving consumer items from businesses and delivers them to retailers. As part of its annual operations planning review, Amazon India chose to shut down its food delivery service, Amazon Food.
Last week, the digital juggernaut also shuttered its ed-tech service, Amazon Academy. During the COVID-19 lockout, ed-tech enterprises such as BYJU, Unacademy, Vedantu, and others experienced a boom. The Labour Ministry summoned the corporation last week for a hearing on its Voluntary Separation Program (VSP). VSP invited Indian employees to leave the company in exchange for monetary advantages.
During the hearing, the company argued that employee departures were entirely voluntary. Also, there was no undue pressure on employees to resign. Employee representatives were unable to attend the hearing and were seeking to reschedule it. According to sources, the meeting will start again in two to three weeks.
Amazon Food serves cuisine from restaurants and various vendors, such paratha packed bread and McDonald’s burgers and fries. Amazon’s business-customer unit will continue to distribute commodities such as groceries and medical supplies to small merchants and bulk buyers. But it will no longer provide door delivery of packaged consumer goods.
During the peak of the COVID-19 pandemic, Amazon Food and Amazon Academy launched in India to assist customers to access crucial services at home. In the food delivery area, however, the Indian industry was already dominated by established competitors such as Swiggy and Zomato. It also includes Big Basket and Dunzo. Byju’s dominated the Indian ed-tech business.
For example, the Indian food business remains intensely competitive, and several behemoths, such as Uber, have likewise struggled to make an effect with Uber Eats. Several systems have been sold and rebranded, including Gururgram-based Grofers, which Zomato purchased in June 2022 and rebranded as Blinkit.
Amazon has added millions of vendors to its platform in India over the last decade. It expanded into categories such as grocery and digital payments, as well as selling fashion, beauty, and travel tickets. Groceries, consumer electronics, fashion, and business-to-business goods are among the areas of concentration for the company in India.
The slowdown in India highlights Amazon’s problems in one of the world’s fastest-expanding e-commerce marketplaces. It is facing regulatory pressure and competition from domestic conglomerates Reliance Industries Ltd. and Tata Group, as well as Walmart Inc.’s Flipkart.
Despite investing billions of dollars in everything from grocery delivery to payments in India over the last decade, the corporation has yet to attain the kind of market dominance it has in nations such as the United States.
Several initiatives under beta testing are also likely to be shelved, according to the individual, who asked not to be identified since the discussions were private. Further, Amazon Academy learning platform will be shutting down in the coming months. It provides online exam prep materials for students applying to medical and engineering schools in India.
According to the individual, job losses in the country are likely to be in the low hundreds or a small proportion of Amazon’s India e-commerce workforce of over 10,000. Amazon employs over 100,000 workers in the country full-time for its global operations.
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