Amazon India launched its Prime Subscription program in more than 100 cities in the country with benefits like free one-day and two-day delivery on lakhs of products and early access to its exclusive offers to customers subscribing to this service. Prime Video, which will include Amazon original TV series and movies besides Indian and global content, is expected to be launched soon as a part of the service. The launch of Prime may boost Amazon India’s growth by improving its customer retention rates.
Amazon Prime is currently available for a free 60-day trial after which the subscription will be available at discounted annual fee of Rs 499. The listing price is expected to be Rs 999, which is quite lower side as compared with the cost of $99 (Rs 6,670) in the US and £96 (Rs 8,450) in the UK. Apart from fast delivery, Prime members will get early access to products in the “Lightning Deals” category every day. They will also get exclusive deals from select brands and sellers.
Prime will be available to customers in 100 Indian cities, and members in 20 cities can choose also same-day, morning or scheduled delivery at a discounted fee of Rs 50 per order on over 10,000 products. These deliveries typically cost Rs 150.
Amazon India country head Amit Agarwal stated, “Prime is great for both customers and sellers. For customers, one-day and two-day delivery, which is something that they enjoy as an occasional indulgence, becomes an everyday experience as they shop for products on Amazon. For sellers, Fulfillment by Amazon (FBA) becomes even more attractive. FBA has helped sellers’ lower costs and increase sales. Now, all their products under FBA will be eligible for Prime. So, Prime will result in more sales for sellers who sign up for FBA.”
In US, Amazon Prime has been a major driver for consumer repeatability. According to Consumer Intelligence Research Partners, Amazon has a total of 63 million Prime members in the US that counts more than half of its total customers, as of June 30. Prime subscribers spend about $1,200 annually on the website, compared with $500 for non-subscribers.
Flipkart, biggest rival of Amazon India has its own version of Prime called Flipkart First. However, Flipkart hasn’t seen the kind of customer interest it expected and Flipkart First isn’t a major contributor to the company’s growth. It highlights the difficulties in operating the program successfully with poor infrastructure of the country.
Amazon is aggressively investing in India to penetrate the market volume of local biggies like Flipkart and Snapdeal. Last month Amazon announced the invest $3 billion to enhance its market share in India. The launch of Prime just before the start of the shopping season in India is expected to help the company consolidate customer base.