Southeast Asia’s largest e-marketplace has released its first go at a loyalty program called LiveUp. Lazada’s new annual membership will cost $49.90 SGD (roughly $35.73 USD) after a free 60-day trial period and is currently discounted to $28.80 SGD ($20.62 USD). What goodies do subscribers get?
- 10% rebate and free delivery in Singapore, rebate capped at $50 SGD per month
- Free delivery for shoppers on Taobao’s shop-in-shop on Lazada
- 5% rebate in RedMart credits and exclusive promotions
- 2 months of Netflix during trial period and 4 months after LiveUp paid membership begins
- $10 SGD off every 10th Uber ride, up to 12 times a year
- Refunded delivery fee on orders over $35 SGD for Uber EATS up to 4 times a month
Why Lazada LiveUp?
The company is well aware that acquiring customers through paid channels can be just as costly as a loyalty program – Forrester analyst estimates that Amazon loses approximately $1 billion annually on Prime-related shipping expenses.
But rather than attempting to change the mind of the masses, why not better satisfy current customers? It will also in turn lead to a higher repurchase rate.
One also needs to look to Lazada’s biggest upcoming threat, Amazon, whether the company is or isn’t entering the region. How has the giant been able to disrupt retail over and over?
For those who aren’t aware, the Amazon Prime program has been available since 2007 and evolved over the ten years. Subscription provides members with a long list of Amazon only benefits that include:
- Free two-day shipping on eligible items to addresses in the contiguous US
- Free same-day delivery in eligible zip codes.
- Prime Now: free two-hour delivery or scheduled delivery on over 10,000 items, from groceries to electronics and more. Plus, get free delivery from your favorite local stores.
- Amazon Restaurants: one-hour delivery from popular restaurants for Prime members in eligible ZIP codes. [LiveUp Uber EATS]
- Prime Video: unlimited streaming of movies and TV episodes for paid or free trial members in the US and Puerto Rico. [LiveUp Netflix]
- Amazon Elements: access to Amazon’s own line of everyday essentials. [LiveUp Taobao]
- Amazon Dash for Prime
- Prime Pantry: members can purchase and ship to addresses in the contiguous US low priced grocery, household, and pet care items for a flat delivery fee of $5.99 for each Prime Pantry box. [LiveUp RedMart]
- Kindle First: early access for members in the US to download a new book for free every month from the Kindle First picks.
- Amazon Music Unlimited: discounted Amazon Music Unlimited monthly plans and exclusive annual plans.
- Membership Sharing and a lot more.
Amazon Prime is one of the few things that currently enables the giant’s retail operations to make a profit.
“Amazon’s total operating profit for its retail operation came out to $2.66 billion. Revenue from our membership estimates covers 143%. Without Prime membership revenue, Amazon’s retail operations result in a $1.1 billion loss.” – The Motley Fool
By rough estimates, Amazon probably has at least 46 million Prime members paying $99 a year and more importantly, their customer loyalty. Prime members said they spent an average of $538 annually with Amazon, far more than the $320 by non-Prime members.
Subscription has become a very sharp tool in Amazon’s threat to all retailers and it makes sense for Southeast Asia’s largest online marketplace, Lazada, to finally equip itself with the same firepower and speed up its path to profitability.
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