The average Indian customer can surprise the best of pundits in any industry. For all the expertise that the multinational corporations possess when they enter into the Indian market, they get to realise only after some time how price-sensitive the market is. Amazon launched its Prime membership with an inaugural rate of Rs 499 per year. The subscription included free deliveries, next day wherever feasible and also access to movies and music. India clocked the fastest growth in membership worldwide. For the next year, Amazon doubled the price to Rs 999.
Now, there are official figures on how many dropped out from the Prime membership and how many renewed /bought new subscriptions. But there must have been a steep drop as Amazon has now announced a new monthly scheme of Prime membership at Rs 129. Amazon is hoping that the customers will find this amount easier to accommodate than a one-time outgo of Rs 999 per year.
Amazon has also entered into arrangements with telcos like Vodafone and Airtel to offer the Prime membership for the first year free if their customers choose postpaid plans (above a certain threshold package). These companies have been struggling to retain their customers following the aggressive pricing adopted by Reliance Jio, and these kind of freebies make it a win-win for the telcos as well as Amazon.
Amazon is servicing 400 cities in the country now and they have found better response from tier 2 and tier 3 towns and cities.
Worldwide, Amazon claims there are 100 million Prime customers though a break-up of the figure country-wise is not available. The company may replicate the tie-up with the telecom operators in other countries also based on the experience here.