In contrast to its dominant e-commerce position in Western countries such as the US and the UK, Amazon faces much stiffer competition in India from e-retailer leader Flipkart and upstarts such as Snapdeal. To shore up its position, Amazon is bringing to bear the most potent weapon in its arsenal: Amazon Prime, which launched in the country last week with a free 60-day trial offer. Will Prime help Amazon turn the tide in India?
The move comes three years after Amazon's debut in India, in which time the e-retailer has pumped billions of dollars into the country to secure its market position, including a reported $3 billion this summer alone.
To entice potential switchers, Amazon has devised a lucrative offer for new Prime members: a free 60-day trial; free one- or two-day delivery with no limits on order size; access to special offers; and all for a low introductory price of 499 INR (around $7.50) per year. The price will later rise to 999 INR ($14.80), with free delivery service available in over 100 cities.
In contrast, Flipkart offers its own Prime-like membership programme, called Flipkart First, for 500 INR per year.
While Prime is obviously much more expensive in the West, the e-retailer also includes streaming video and original programming in its membership offer. According to reports, Indian consumers won't have to wait long to access similar benefits; the retailer has spent a reported $300 million to secure rights to streaming content and develop original programming for its Prime members, who may be able to access streaming content as early as the end of 2016.
Will Prime help Amazon encourage switchers and cement loyalty in the increasingly competitive Indian e-retail arena? Flipkart may have the early edge - but if there's one thing we've learned about Jeff Bezos, it's that he's willing to play the long game.