Amazon Launch Half Baked Prime Service In OZ
US online retailer has launched what appears to be a half-baked Amazon Prime service, days out from cutting off Australians from tens of thousands of their global product range.
The new service that was announced to some select mainstream media last night and trade media 14 hours later, means that consumers who pay a monthly Prime fee up front of $6.99 will still have to wait up to two days and in some cases pay a $19 shipping fee to get goods shipped, other items will be shipped free.
It also comes four days after eBay began its own subscription service with free postage, access to special deals, discounts and other benefits.
Another hurdle for the Australian service is that the bulk of products ranged on Amazon are from marketplace participants who by majority, will not be part of the Prime Australia free two-day delivery offering, instead consumers will only have access to a select number of eligible Amazon products.
Based on a monthly subscription of $6.99 or $59 a year, and a $4.99 a month introductory offer the new Amazon Prime Service is extremly limited compared to what Amazon customers in the USA, Canada, UK and Europe get access to.
As of July 1 Australians, will be blocked from shopping on its international websites blaming the government’s new GST rules on online purchases. Amazon Australia only has 60 million products on amazon.com.au this is a fraction of the 480 million products available on amazon.com
Prime International vice-president Jamil Ghani claimed members in Australia would have access to the widest selection of Prime benefits at launch than in any other country, including free delivery on millions of local and international items (through the amazon.com.au global store), access to movies and TV shows through Prime Video, access to more than 1000 e-books through Prime Reading, benefits for gamers through Twitch Prime and discounted priority delivery.
Analysts had previously expected Amazon to launch Prime in Australia in mid-July when the global e-commerce giant conducts its annual Prime Day promotion with additional discounts and deals on millions of products.
ChannelNews understands that Amazon is struggling to deliver same day services in Australia because of costs and transport infrastructure problems.
They are also still trying to recover after the underwhelming launch of Amazon’s new Australian e-commerce offer last December. The decision to bring forward the Prime offering is seen as a marketing ploy designed to stimulate interest in what appears at this stage to be a struggling offering claims one observer.
“In most other markets Prime has been the driver for sales and earnings,” one analyst said.
However, the success of Prime in Australia will depend on Amazon’s execution, including the breadth and depth of its range and the ability to deliver on its promise to reach 90 per cent of the Australian population within two days.
“The success of Prime will hinge on their ability to get first-party supply more broadly than they have at the moment,” one analyst told the AFR, “and they have to get their algorithms working properly around pricing and search.”
“If they’re launching Prime, that implies they have fixed all the issues – you would not launch Prime without having all your ducks in a row,” the analyst said. “You can’t keep disappointing forever.”
“We have been working hard to expand selection, ensure customers get great value, and improve the Amazon shopping experience for Australians,” said Amazon Australia country manager Rocco Braeuniger.
“With the addition of Prime, customers can now enjoy the most convenient way to shop and take advantage of new and expanding benefits from Amazon.”
Another problem for Amazon is that eBay is still seen as Australia’s most popular e-commerce site.
According to Roy Morgan, more than 9.4 million Australians visit ebay.com.au each month, 5.6 million visit second-hand auction site Gumtree, 4.7 million visit Amazon and 2.3 million visit Kogan.com (visitation in an average four weeks over 12 months to March 2018).