In a strategic move to compete with rival Flipkart, Amazon India has unveiled the Prime Shopping Edition, a tailored variant of its renowned Prime membership program. This initiative is exclusively designed for Android users in India, offering an enticing array of shopping-related perks at a subscription cost of Rs. 399 per year. While this new tier grants members access to free shipping and one-day deliveries, it distinguishes itself by omitting entertainment features such as Prime Video, Music, Reading, and Gaming, which are integral to the traditional Amazon Prime subscription priced at Rs. 1,499.
Challenging the Status Quo
Amazon’s launch of the Prime Shopping Edition closely follows Flipkart’s introduction of VIP, a subscription model priced at Rs. 499, aimed at luring Amazon Prime-like customers. However, Flipkart VIP is primarily targeting shoppers in major metropolitan areas like Delhi, Bengaluru, and Mumbai, where Amazon already enjoys a robust presence.
Saurabh Srivastava, Vice President at Amazon India, noted, “Prime is being adopted all across India, not just in metro cities. We’re seeing a lot of Prime customer sign-ups from Tier 2 and Tier 3 cities… and they’re probably doing this because the wide assortment of products is important for them. They can’t find it elsewhere.”
Strategically Targeting Android Users
The Prime Shopping Edition is exclusively available on the Amazon app or mobile browser for Android devices. This focus on Android users is well-founded, given that India boasts over 650 million smartphone users, with more than 85 percent using Android devices.
Expanding the Prime Ecosystem
Amazon’s decision to unbundle its Prime offering is not unprecedented. A year ago, it introduced the Prime Video Mobile edition plan priced at Rs. 599 per year. The launch of Prime Shopping Edition coincides with the commencement of the festive season sale, setting the stage for a competitive showdown between the two e-commerce giants.
Driving Profitability with Prime
Amazon Prime customers represent a highly profitable segment for the company. Non-Prime shoppers on Amazon have an average order value (AOV) of around Rs. 1,000-1,200, while Prime customers exhibit an AOV of Rs. 1,800-2,000, nearly double that of regular shoppers. As a result, this new offering may also be viewed as Amazon’s endeavor to expand its base of Prime customers in India, a pivotal market for the tech giant.
“Once customers see and experience this shopping benefit, they would love to become a full member and enjoy all the other things. We don’t want them to think that it’s all or nothing. We want them to experience the shopping benefits, and we believe that they will upgrade to full membership later,” Srivastava concluded.
