Amazon launches 'Prime' in India as Flipkart First goes into cold storage

The service will offer subscribers one and two-day deliveries at no extra cost on all merchandise marked as Prime

Amazon has launched its Prime service in 100 cities across India, an offering that has helped it build customer loyalty and subscription revenue globally, to take on larger Indian rival Flipkart in the country.
 
Amazon will offer subscribers one and two-day deliveries at no extra cost on all merchandise marked as Prime on its website and app. It will also offer 30 minutes early access to daily deals on its platform, while users in 20 cities will be able to opt for morning and scheduled deliveries at a subsidised cost of Rs 50.
 
Apart from this, Prime users will also get access to Prime Video, its very own digital video subscription service which is similar to Netflix, which it is bringing to the country soon. The company is said to be looking at a $300 million investment in India to develop original content for the country and is in talks with Bollywood producers for the same, according to Factor Daily.

 

The Prime subscription will cost users Rs 999 in India, but for now the company is offering it at a discounted price of Rs 499. Users also get a two-month free trial for the service as Amazon wants as many people to experience the benefits of swift delivery and deals which will hopefully drive them to pay for the service.
 
In the US, Prime subscriptions account for a big chunk of the company’s earnings (the company does not disclose this figure). Priced at $99.99 per annum, it is estimated that nearly half (46%) of US households have at least one member who subscribes to Prime.

 
Moreover, similar to in the US, Amazon will be looking to woo repeat buyers with Prime. In the US, a typical Prime user spends close to $1,100-1,200 per year, nearly twice as much as a non-Prime user spends ($600). Moreover, Prime continues to grow at a fast pace globally.
 
Amazon’s  Prime service comes to India at a time when homegrown rival Flipkart has put into cold storage its Flipkart First service that was modeled around Prime within a year of its launch in 2014.  Flipkart First offered faster free delivery for subscribers and other exclusive deals to its subscribers,

 
Amazon has been gearing up for the launch of Prime for quite some time now. Recently, the company added six new fulfillment centres, taking it overall warehousing capacity in the country up to 2.5 million sq ft across 10 states, making it the largest among Indian e-commerce players. This will help the company make faster deliveries that it will now promise its Prime customers.
 
Flipkart, which grew to the top of the e-commerce charts in India due to its superior customer service, is said to have lost the advantage after it began focusing merely on growth. While the company has now rejigged its strategy to focus on customer satisfaction, Amazon has been able to catch up and is snipping at its heels.