September 22, 2018

Amazon India Mounting Efforts to Tap its Potential in Smaller Towns through Prime

Image Credit pixabay.com

With the Indian E-commerce space witnessing all-time high battles, it has become increasingly tough for e-retailers to maintain a steady growth. Recent entry of US giant Walmart coming into fray, with stake acquisition in Flipkart is making another US e-retail mammoth Amazon leave no stone unturned to expand its reach. In order to tap latent potential in the rural and semi-urban areas, Amazon is trying to garner more users through its paid service under Amazon Prime. Alongside, the e-tail giant also comes up with various discounts, deals, pay offers, Amazon credit card offers and others such.

Increasing disposable incomes, easy access to new and exclusive launches of products and faster delivery of their desired items even in remote locations is one of the driving factors of Amazon Prime in Tier 3 and Tier 4 towns in India. People in non-urban cities are increasingly costing up the idea of online shopping and shedding their inhibitions about the quality of products as platforms like Amazon are providing 100% quality assurance on most of their items, and this attracts them even more.

Akshay Sahi who heads Amazon Prime India says, “Amazon is a customer-obsessed company. We want more and more engagement with customers. So, we give them tremendous value. The more they enjoy the benefits, the more the flywheel gets spinning for Amazon. When we offer these benefits (free shipping, video streaming, etc.), that’s how loyalty is born. Loyalty is earned through the value we provide to customers continuously.”

According to Sahi, Amazon receives 30 per cent of its total shopping orders from Prime category, which it aims to increase significantly as and how its Prime member base further widens to the small towns and other remote areas.

He further said stressing on the rising trend that Amazon’s target is to bring all their existing users on Prime as soon as possible.

Amazon Prime is indeed a valued arrow in its quiver. Its proposition is quite simple and straight forward – Pay Rs 499, for a year’s membership and get fast and free shipping for millions of products ordered from its app or website. As next-day-shipping is charged at Rs 100 a package for customers who have not subscribed to Prime, a member can recoup the annual fee in about five orders. This is quite obviously an important magnet for value-conscious Indian consumers. Additionally, Prime membership also offers free access to hundreds of movies, television shows and Amazon’s original content which is a bonus for its subscribers.

A major irresistible feature that is driving the demand from small towns is accessibility to aspirational products such as from the categories of fashion, beauty, smartphones and other luxury products which may not be available to the consumers in their area in brick & mortar stores.

In order to maintain the top slot Amazon has also ventured into online grocery stores which although largely remain popular in the metros but semi-urban towns are also slowly catching up to the idea.

Ahmedabad remains the top city to have most number of Prime members beyond India’s top metros and small-town users are also getting on board Amazon Prime. According to Sahil, customers from other towns such as Amreli, Dahod, Himmatnagar, Patan, Anand and Mehsana are also using Prime membership for popular categories of smartphones, fashion and beauty which is helping Amazon to increase its customer base.

Amazon keeps adding perks to its Prime Membership

Amazon Prime is considered to be one of the most competitive services offered by the e-tail giant and leaves no stone unturned to keep it competitive. All those a part of it are the most loyal and valuable customers.

“There are now more than 100 million customers around the world subscribed to the service”, said CEO Jeff Bezos. And, Amazon keeps adding perks to its offering. While most people associate with its 2-day shipping guarantee, it also entails benefits like music and video streaming service available exclusively to the prime members thereby adding more value.

While Amazon emphasises on adding services, at the same time, it also wants to assure that when customers take a second look at whether they’re really getting value for their money with the increased prices, they do not think twice by renewing the Prime services for the following year. New products and services are one of the ways by which Amazon does this, it also takes care that its service standards don’t slip in the meantime.

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