Amazon Prime To Work On International Growth
Amazon is working on a strategy to improve its international market presence.
Amazon Inc. and Alibaba Group Holding are somewhat same in one thing; foreign market presence. Alibaba is the Chinese e-commerce giant, which accounts for more than 80% of the market share. On the other hand, Amazon is the world’s biggest retailer and the reigning monarch of American online shopping. Both companies lack in international growth and market presence in each other’s country and markets.
Over the past couple of years, an intriguing pattern is seen at the company. The sales of Amazon are increasing rapidly; in fact, it has been doubled in the past three years or so. Recent success of the online retailer is because of its excellent loyalty program known as Prime, which costs $99 for one year.
Amazon Prime offers various advantages out of which free two-day shipping and free access to video streaming service are the most intriguing. Majority of the online shoppers do own Prime membership but in the United States.
This seems to be the main reason behind stagnant international sales of company recently. The United Kingdom operations generated an increase in revenues by nearly 40% during last three years. This is the lowest than the rest of the group.
Prime’s biggest challenge at this moment is international growth. According to sources, Amazon is thinking to implement the same strategy which was the key in its domestic growth i.e. Prime to boost its international sales. It launched its loyalty program 11 years ago initially in the United States and offered free two-day shipping to all the members. Since then, the online retailer expanded its program beyond US. It offers Prime program to its UK customers in £79, which is the most expensive Prime subscription so far.
Furthermore, the e-commerce giant is working on bolstering the services in its biggest international markets. Alibaba, on the other hand, is also looking to improve its international presence. Currently, both companies are expanding their global footprints in India where they will go head to head.
Apart from its Prime service, Amazon is also working on expanding its Prime Now service in numerous international markets. The two-hour delivery option will be given to subscribers in major cities. Recent additions in the expansion plan include video streaming service for Japanese subscribers, free two-hour delivery in Milan, and its services in Belgium under the brand name of Premium. All of this happened last month.
The company just made a deal with the fourth largest supermarket chain of United Kingdom, Wm Morrison. Only for UK subscribers based in London, they will be offered free two-hour delivery from Wm Morrison.
