Amazon shuts wholesale e-commerce platform, its third business in India
What's the story
Amazon will bring down the curtain on Amazon Distribution, its wholesale e-commerce platform that caters to small neighborhood stores in India.
The program will be discontinued in a phased manner. The new announcement came after the company decided to shut down its food delivery business and online learning platform.
This brings us to the question: what is going on with Amazon in India?
Context
Why does this story matter?
Knock after knock; is that what Amazon has come down to in India? The company was supposed to win in India, but is it even going to survive now?
Maybe that's an exaggeration, but if an investor happens to think so, you won't be able to blame them.
The question is, where and when will the restructuring end for Amazon?
Distribution
The program currently has around 50 employees
Amazon Distribution provided neighborhood kiranas, pharmacies, and department stores access to Amazon's inventory. The program is only available in Bengaluru, Mysuru, and Hubli.
Through the program, small retailers received fast-moving consumer goods sourced from companies by the distribution unit. Amazon aimed at reaching small cities and neighborhoods with the program.
Around 50 employees work on the project.
Official words
The program will be discontinued in a phased manner: Amazon
Amazon said that it decided to shut down the business as part of its annual operating planning review.
"We are discontinuing this program in a phased manner to take care of current customers and partners and we are supporting our affected employees during this transition," the company said.
For the employees working on the project, the company is trying to find alternative roles internally.
Online learning
Amazon Academy was launched last year
Amazon has not made it clear why it decided to shut down the distribution business, but this comes after it called it quits on the food delivery and edtech platforms.
Amazon launched Amazon Academy, its online learning platform for high school students, last year. It sought to prepare students for various engineering entrance examinations in the country.
Reason
The online learning platform failed to make a mark
Amazon Academy was expected to pose a considerable threat to established players such as BYJU'S, Unacademy, and Vedantu. However, it did not manage to perform as the company hoped.
As a result, the company decided to shut it down. Again, Amazon did not mention the reason behind the shutdown, but it's clear that it is part of the recent cost-cutting measures.
Foods
Amazon never promoted or marketed its food delivery platform
Amazon Food was launched in 2020. The company saw some good signs initially with new partnerships and tie-ups.
However, like Amazon Academy, it failed to pose a challenge to established players such as Swiggy and Zomato. It should be noted that the company never really promoted or marketed the platform.
And now, it will be shut down by the end of this year.
Reason
Amazon is shutting down businesses to cut costs
Amazon's decision to shut down three ventures comes after it was reported that the company planned to lay off 10,000 employees. If we put two and two together, it is clear as day that Amazon wants to cut costs.
In fact, it needs to cut more than what it may have imagined in the beginning. Will we see more heads rolling?
Exit
Amazon Distribution never grew out of 3 cities
Amazon has invested to the tune of billions in India. Two years ago, Jeff Bezos announced $1 billion to digitize small businesses in India.
Amazon Distribution could have been the company's way into India's small cities. The program, however, never grew out of the initial three cities, why?
The wholesale exit is a key decision considering the growth potential in the multi-billion dollar sector.