Amazon shutting down wholesale distribution in third business exit in India

Amazon shutting down wholesale distribution in third business exit in India

Amazon is shutting down its wholesale distribution business in India, the latest in a series of retreats for the retailer in the key overseas market where it has deployed over $7 billion in the past decade.

The American e-commerce giant said Monday that it is discontinuing Amazon Distribution, its wholesale e-commerce website available to small neighborhood stores in Bengaluru, Mysore and Hubli.

“We don’t take these decisions lightly. We are discontinuing this programme in a phased manner to take care of current customers and partners,” a company spokesperson said in a statement.

Amazon Distribution was designed to help kiranas, the neighborhood stores in India, pharmacies and department stores secure inventory from the e-commerce giant. The company didn’t say precisely when the service will be discontinued.

“We offer a wide range of products at competitive prices and the convenience of next day delivery at your door-step. As a member, you can purchase thousands of items for resale at any time of the day at competitive prices and in bulk quantities, pay via the various payment options available, get GST bill for your order, and convenient and reliable door-step deliveries the next day,” the company describes on Amazon Distribution website.

In a memo, Amazon chief executive Andy Jassy warned employees that the company will undertake more layoffs next year.

Amazon plans to continue to focus on its core e-commerce offerings in India, according to a source familiar with the matter. Last week, Amazon launched its second AWS region in India and pledged to invest $4.4 billion in its cloud operations in the country by 2030.

India is a key overseas market for Amazon, but also one where it faces stiff competition from heavily backed rivals. Amazon is lagging Walmart’s Flipkart and and towns, according to a recent report by Sanford C. Bernstein. Amazon’s 2021 gross merchandise value in the country stood between $18 billion to $20 billion, lagging Flipkart’s $23 billion, the analysts said in a report to clients.

At stake is one of the world’s last great growth markets. The e-commerce spending in India, the world’s second largest internet market, is expected to double in size to over $130 billion by 2025.

Amazon has been attempting to increase its presence in India through stakes in local firms and has also .

Amazon did not immediately say if it plans to close any other business line in the country.