Amazon looking to repeat its US success with Prime in India

Looking to drive more loyalty among its growing customer base in India, Amazon India has launched Prime subscription service in the country. With Amazon Prime, it will offer free one day and two deliveries to customers and early access to its exclusive offers.

It remains to be seen if Amazon is able to repeat this success in India it had experienced in the US. The launch of Prime here comes just before the shopping season kicks off in India. Prime has been a major driver for repeat purchases, a key metric for online retailers.

Amazon Prime in India is currently 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 if compared to its other market like $99 (Rs 6,633) for US and £96 (Rs 8,691) for the UK.

According to research from Consumer Intelligence Research Partners quoted in Fortune, Amazon has a total of 63 million Prime members in the US, more than half of its total customers, as of June 30.

Amit Agarwal, the vice president and country head of Amazon India, said, “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.”

Currently, 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.

“For sellers, fulfilment by Amazon is now an even more powerful opportunity to rapidly grow their business and at the same time, provide customers across India with a vast selection and unlimited fast free Prime delivery,” added Agarwal.

According to Consumer Intelligence Research Partners report, Prime subscribers in the US spend about $1,200 annually on the website, compared with $500 for non-subscribers.

A study by Google and AT Kearney, about one-third of the online shoppers in India, are expected to drive two-thirds of the sales for online marketplaces by 2020. Around 94% of these high-value customers are willing to pay for premium services, which includes faster delivery, hassle-free return and extended warranty.