Amazon is looking to expand internationally in order to boost its Prime subscriber base, as the growth of Prime membership in its key U.S. market has been relatively slow. The upcoming Prime Day event will be the largest ever in terms of its global reach, with sales starting in 24 countries, including Turkey. In India, Prime Day will run from July 15 to 16.
For Amazon, Prime membership is highly valuable as members tend to spend significantly more on the platform. According to a survey by Bank of America, Prime members in the U.S. spend around $2,000 on Amazon per year, approximately four times more than non-Prime members. The recurring fees from Prime membership contribute to high-margin revenue growth for Amazon, especially as overall online sales growth stagnates.
While Amazon keeps specific Prime statistics under wraps, estimates suggest that the majority of Prime subscribers are from the U.S. Recent projections from Bank of America and Insider Intelligence indicate that U.S. subscribers accounted for approximately 73% to 74% of the membership base in 2020.
To continue expanding Prime internationally, Amazon faces the challenge of tailoring the value proposition of Prime membership to different geographic regions. While core benefits like free and fast shipping and Prime Video are offered globally, Amazon recognizes that Prime cannot be a one-size-fits-all model.
Lisa Leung, worldwide director of membership growth at Amazon, explains that through focus groups, surveys, and customer feedback, the company learns the specific needs of customers in different regions. This information helps Amazon create localized Prime membership packages.
Overall, Amazon’s focus on international expansion through promotional events like Prime Day which reflects its commitment to meeting the diverse needs of customers worldwide and securing its position as a leading global e-commerce player.