Amazon is shutting down Diapers.com and five other shopping websites operated by Quidsi, citing the failure of the division to turn a profit since Amazon acquired it in November 2010.
The shutdown will result in the loss of more than 250 jobs at Quidsi, which was founded by Marc Lore, now the head of Wal-Mart’s e-commerce operations. The other sites affected include Soap.com, Wag.com, and BeautyBar.com.
“We have worked extremely hard for the past seven years to get Quidsi to be profitable and unfortunately we have not been able to do so,” an Amazon spokesperson said in a statement.
Quidsi’s software development team will focus on building technology for the grocery delivery service AmazonFresh, the statement said.
According to Reuters, the move “underscores a shift in Amazon’s focus to groceries and other areas” since it closed the $500 million acquisition of Quidsi. “Fresh food represents a large and fledgling market for online retailers, in contrast to goods such as diapers that have been the subject of price wars in recent years.”
“Consumables like soap and pet food are often priced very competitively by retailers in order to drive price perception and ultimately drive online and in-store traffic,” Guru Hariharan, chief executive of retail technology company Boomerang Commerce, told Reuters. “While unfortunate, the shutting down of the Quidsi sites isn’t completely surprising.”
The Quidsi acquisition was Amazon’s fourth-largest to date. Since the deal, Amazon had continued to invest in Quidsi, launching new brands such as green grocer VineMarket.com and putting the individual sites on mobile devices.
“Amazon had originally snapped up Quidsi to eliminate the competition on the market, but the sites today overlap a lot with its core business,” TechCrunch said, citing AmazonFamily, which is aimed at helping new parents save on diapers and other items.
Wedbush Securities analyst Michael Pachter said Amazon Prime had likely “grown to the point where members no longer separately shop on Diapers.com or Soap.com so maintenance of separate product-specific sites makes less sense.”