Free shipping no attraction for Amazon Prime customers; guess what is...

When Amazon launched its video streaming platform, Amazon Prime Video, in 2011, the idea was to incentivise the Amazon Prime members with an opportunity to consume a plethora of content, in addition to the free shipping and the value proposition that the ecommerce retailer was already offering to its consumers. 

In India, however, the trigger to buy an Amazon Prime subscription is not so much its free shipping or savings proposition. Bulk of Indians subscribe to Prime to consume content on Amazon Prime Video. While Jamil Ghani, Vice-President, Amazon Prime, agrees that India is an entertainment forward geography, he says that even across the world the reasons for joining Prime have become more heterogeneous. “Members coming for shipping and staying for other things is no longer true. You have members signing up for shopping events and trying to avail savings, you have members coming in for Prime Video.”

Free shipping is almost a given in India. The most basic example being the good old kirana stores who deliver anything from a humble loaf of bread to monthly grocery free. No wonder, free shipping isn't an attractive bait for Indian consumers. In fact, Ghani says Amazon Prime is now looking at offering across the world a host of services to its members in addition to its core proposition of shipping and savings. “It helps in attracting an incremental audience. We don’t just want to be just a shipping or streaming service, we want to be a live service that provides solutions to our customers across multiple touchpoints across the day, week or year,” says Ghani. The platform has recently invested in live sports with the India-New Zealand cricket series.

Ghani says that Amazon Prime India has been at the forefront of a lot of innovations that have been replicated in other emerging markets. One of the most prominent innovations has been creating regional content. “We have maximum investment in local dialects and languages in India than we have anywhere else in the world. That strategy has made us feel local. Prime Members in India using Amazon Pay can avail a diverse set of special offers and exclusive experiences.” The platform also introduced quarterly and monthly subscription plans for the value conscious Indians which have also been replicated in several emerging markets.

Amazon has over 200 million Prime subscribers across the world. The ecommerce company has recently been in the news for layoffs. In India, there is also a talk about its streaming platform being extremely cautious about content acquisition. Will this have an impact on its strategy of offering diverse experiences to the Prime members? Ghani does agree that costs are a matter of concern (the platform took up its annual subscription from ₹999 to ₹1,499), but he quickly adds that the platform is investing on things that are going to matter the most to its consumers.    

“Our focus remains exactly the same. In fact, I would argue that our customer proposition is stronger in a recessionary environment than it is in a non- recessionary environment. Prime, because of its bouquet of value, gets higher preference from customers when money is tight,” explains Ghani. He claims that Amazon saw unprecedented growth during the pandemic and in the inflationary environment which followed thereafter. “We reached our 24 month projections in 12 months. We saw unprecedented levels of shopping during the pandemic. Grocery sales went up around the world. We have come out of the peak, but it is still higher than in 2019. So, there have been structural changes in how members look to Prime to solve their needs.”