Amazon has launched its prime membership program in India, reports Tech in Asia.
This is considered a well calculated move following a series of steps to solve the delivery conundrum in what is a very disorganized market. There is a 60 day trial period for Amazon Prime, twice of the one month trial period offered in other countries. The introductory annual subscription fee is set at $7.40.
Membership benefits include fast and free delivery in 100 cities, and early access to deals. Amazon has also announced Prime Video, giving members access to movies and TV shows, will be coming soon to India.
Amazon Prime’s delivery holds the key to winning the ecommerce battle against local rivals Flipkart and Snapdeal.
Amazon Prime’s guaranteed one day delivery will become an every day experience instead of an occasional indulgence, and with no minimum purchases. Prime will provide unlimited convenience.
For sellers, Fulfillment by Amazon is now an even more powerful opportunity to rapidly grow their business.
Steps taken to preparing for Prime
It invested heavily in warehouses across India as Amazon recognizes the difficulties of a centralized system which it uses in other countries. The localization of warehouses has not only helped in reducing the cost and time for deliveries, it has also encouraged sellers to use the ‘Fulfillment by Amazon” option. There’s even a facility for picking up goods from the vendor.
Amazon Prime came in once the infrastructure could provide support.
When Amazon came to India three years ago, it had to restrict itself to a marketplace model, rather than an inventory-based ecommerce. The reason for this is because India has restrictions on foreign direct investment (FDI) in B2C ecommerce. By acting as a marketplace, Amazon ostensibly just connects third party sellers with buyers, with fulfillment services as an additional offering.
The government’s FDI restrictions were meant to protect the millions of small shopkeepers in India. However, Amazon is partnering with the local shops to ease its delivery hassles. This is especially a game-changer in tier-2 and tier-3 towns and rural India.
Amazon Prime’s entry into India shares a similar timeline with local competitor Flipkart’s acquisition of Rocket Internet’s Jabong.
A version of this appeared in Tech In Asia on July 27. Read the full version here.