Amazon.com is gearing up to launch in South Africa later this year. Its popular Amazon Prime service will be launched in the country, too, the company has said, and could post a threat to its local rivals.
Incumbents like Takealot Group view the US e-commerce giant as a threat to hard-won market share. Although there are other international contenders in the online shopping space, including the fashion-focused Shein and tech-leaning Temu — both operating from China — it’s Amazon that’s still seen as the global online retail giant to beat.
Amazon’s drawcard is the sophistication of its logistics operation, supported by Amazon Prime. According to Statista, Prime has 167 million subscribers in the US (about half that country’s total population) and some 200 million worldwide pay to use it.
But what exactly is Amazon Prime, and what can South African consumers expect from the service?
In the US, Prime membership – which costs US$14.99/month or $139/year – includes shipping benefits, with free two-day shipping on qualifying items as standard. No minimum purchase amount is required, so even a single low-priced item costing only a few dollars will be delivered free of charge.
Same-day shipping is also available for certain products, but this is limited to specific regions in the US only.
In its most basic form, Prime’s core service offering combines a mature logistics network with a large catalogue of products for a smoother online shopping experience. That is arguably not dissimilar to other players in e-commerce. Where Prime stands out from its competitors is in the additional benefits subscribers enjoy through additional products and services from the rest of the Amazon ecosystem such as Prime Video, Prime Music, Prime Photos and Prime Pantry.
Prime Video
Amazon Prime subscribers get free access to Amazon Prime Video, with unlimited streaming of movies, series and documentaries. The Prime Video catalogue boasts a mix of original and externally produced content.
Prime Video’s most successful original productions include the series remake of the action crime thriller Reacher, The Terminal List and spy thriller Citadel. It’s also home to The Grand Tour, hosted by popular motoring journalists Jeremy Clarkson, James May and Richard Hammond.
Also included in the Prime subscription is Amazon’s audio streaming platform, Prime Music. According to the Amazon website, Prime Music subscribers have access to a library of podcasts and more than 100 million songs free of advertising interruptions.
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Other digital services that come bundled with a Prime subscription include Prime Photo – a storage service that offers unlimited image storage in original quality – and Prime Gaming, which includes games and a subscription to Twitch Prime with bonus games, exclusive in-game content, and more.
Readers also enjoy access to hundreds of books, magazines and other reading materials – although this content is only accessible through Amazon’s reading devices such as a Kindle e-reader or Fire tablet.
Prime Early Access gives subscribers access to sales such as Black Friday and Amazon’s lightning deals half an hour before other shoppers can make purchases. Prime Day, an event that actually lasts for two days, is an annual sale held by Amazon exclusively for Prime members.
Prime’s package is undoubtedly appealing, but experts argue that although South African consumers will get a similar offering, it is unlikely to be a “carbon copy” of the US version of the service.
“A lot depends on how Prime is structured in South Africa because the setup has changed over time as Amazon figures out what has worked and what hasn’t in various markets,” said Arthur Goldstuck, MD of research firm World Wide Worx.
Read: Retail isn’t the only sector Amazon is about to disrupt in South Africa
Even so, Goldstuck said Amazon Prime has disrupted markets where it has been launched – and the same thing will likely happen in South Africa, especially when it comes to streaming and delivery.
“Amazon Prime will likely bundle Prime Video and do that at a very competitive price. That means it will be a serious contender against Showmax and Netflix,” said Goldstuck.
“In terms of free delivery, it will have a similar appeal to Checkers Sixty60 in that, for a monthly fee, you get free delivery over a certain value. That will immediately attract attention.” – © 2024 NewsCentral Media
