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Amazon grows services around the world

August 2, 2016 04:43 PM
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It’s an established fact that after joining Amazon Prime members do much of their online shopping with the e-retailer. Now Amazon.com Inc. is targeting consumers in the world’s fastest growing e-commerce market, India, with the service. It is one of several international investments Amazon has made in recent weeks.

Amazon’s Indian e-commerce site, Amazon.in, began offering yearlong Prime memberships last week for 499 rupees, which is equivalent to about $7.50. The 499 rupee price is for early registrants; the regular price will be 999 rupees, or about $15.

For now, the India Prime service allows Indian consumers in more than 100 cities to get unlimited one- and two-day delivery of goods ordered on Amazon.in from merchants that use Amazon’s Fulfillment By Amazon service, whereby marketplace sellers outsource warehousing, fulfillment and delivery tasks to Amazon. Consumers not in the initial Prime cities who join Prime get unlimited free shipping, but one- and two-day delivery is not guaranteed. The e-retailer says it’ll be making announcements about digital Prime benefits, such as Prime Video streaming, in the coming months.

It is the first time Amazon has made Prime available in a developing region, but Amazon has made clear that it wants to play a big role in e-commerce in India since it launched Amazon.in in mid-2013. “Customers and sellers can count on us to continue innovating and investing heavily in India,” Amazon CEO Jeff Bezos said last fall. To date, the e-retailer has said it will invest $5 billion in India. In India Amazon operates only as a marketplace; it does not sell any goods directly due to Indian laws that prohibit foreign companies from selling their own products online.

E-commerce is nascent in India, but growing fast. Only 19% of Indian consumers shop online and e-commerce accounts for 1.7% of total retail spending, according to Internet Retailer’s just-released Global 1000. However e-retail sales in India grew 129% last year and clock in with a five-year compound annual growth rate of 67%, per Global 1000 data.

Amazon operates 13 country-specific sites, and offered Prime in nine of them before adding India. Those Prime-eligible countries are the United States, United Kingdom, Spain, Japan, Italy, Germany, France, Canada and Austria. Amazon does not say how many Prime members it has but says Prime membership grew 51% in 2015.

Amazon also announced other international investments in recent weeks. It will build its second large-scale fulfillment center in Italy, with the opening planned for fall 2017. The 60,000-square-meter (196,850 square foot) facility will be near Rome. Amazon is spending 150 million euros ($168 million) on the build. Amazon also announced it is opening a new sortation center near Turin, in the northwestern part of the country, to facilitate deliveries in the region.

Amazon.es also debuted Prime Now delivery—which offers Premium members delivery in two hours or less—to consumers in Madrid. (Prime is called Premium in Spain and France.) It is the first time Prime Now delivery has been offered in Spain. Delivery is free in two hours and consumers can pay a 5.90 euro ($6.50) fee for delivery in one hour. 18,000 products are eligible, including fresh and frozen grocery items. Further, Amazon.co.uk expanded Prime Now delivery to consumers in and around Glasgow, Scotland. Prime Now is already available throughout the United Kingdom, including London, Liverpool and Manchester. Prior to the Glasgow addition, Internet Retailer estimates Prime Now delivery can reach 23% of U.K. consumers. (See chart.) With the Glasgow addition, 25% of U.K. consumers live in Prime Now markets. Elsewhere in Europe, Prime Now is available in Paris, Berlin, Rome and Milan.

 

 

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