BENGALURU: Amazon India has launched its Prime subscription service in the country, as it looks to drive more loyalty among its growing customer base in India. Amazon Prime in India will offer free one day and two delivery to customers and early access to its exclusive offers. Prime Video, which will include Amazon original TV series and movies besides other Indian and global content, is expected to be launched as a part of this service later.
Currently, Amazon Prime is available for a free 60 day trial after which the annual subscription will be available at a “special introductory price” of Rs 499. The listing pricing of Prime membership is expected at Rs 999, which is much lower as compared to its other market like $99 (Rs 6,633) for US and £96 (Rs 8,691) for UK.
Prime will be available to customers in 100 cities, and members in 20 cities can also choose 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.
“We are very excited to bring Prime to our customers in India. With Prime, guaranteed one-day delivery becomes an everyday experience instead of an occasional indulgence, and with no minimum purchases, it provides unlimited convenience all year long” says Amit Agarwal, vice president and country bhad, Amazon India.
“For sellers, Fulfillment by Amazon is now an even more powerful opportunity to rapidly grow their business and at the same time, provide customers across India with vast selection and unlimited fast free Prime delivery,” added Agarwal.
Amazon India has been looking to double down its investment in India, Jeff Bezos, CEO of the Seattle-based giant, last month announced plans to increase investments in India from $2 billion to $5 billion.
Prime has been a major driver for repeat purchases, a key metric for online retailers, for Amazon in US. Amazon has a total of 63 million Prime members in US, more than half of its total customers, as of June 30 according to research from Consumer Intelligence Research Partners quoted in Fortune. Prime subscribers spend about $1,200 annually on the website, compared with $500 for non-subscribers, according to the same report.
It remains to be seen if Amazon is able to repeat this success in India. The launch of Prime here comes just before the shopping season kicks off in India.
About one-third of the online shoppers in India are expected to drive two-thirds of the sales for online marketplaces by 2020, according to a study by Google and AT Kearney. Around 94% of these high-value customers are willing to pay for premium services, which includes faster delivery, hassle-free return and extended warranty.
Market leader Flipkart is also looking to build more loyalty among this set of customers. In 2014 it had launched an Amazon Prime like service called Flipkart First, but it did not take off. ET reported earlier this month that Flipkart plans to launch a supercharged version of its product assurance programme for buyers, as India’s largest online marketplace seeks to improve the shopping experience for customers and catch up with Amazon India’s service levels.
Under F-Assured, Flipkart will promise improved delivery service and a stricter quality check of products, among other things. F-Assured will seek to counter Amazon’s Prime priority subscription service.
Amazon India has been preparing for the festive season, as it looks to topple market leader Flipkart as India’s largest online marketplace. The company recently announced opening of six new fulfillment centers (FCs), takiing total FCs owned by the company to 27 with total area of close to 2.5 million square feet and storage capacity which is 7.5 million cubic feet of space.
Amazon has continued growth momentum in 2016, having increased 150% in the first calendar quarter from a year earlier. It added 90,000 new products daily between January and March. Now, Amazon India has 55 million products listed on its platform while Flipkart has more than 40 million and Snapdeal has 35 million.