Amazon launches Prime Now services in Singapore

on Jul27

There are several delivery options given: For orders below 40 Singapore dollars ($29.48), users pay a S$5.99 delivery fee; orders above S$40 are delivered free in a two-hour delivery window. For those wanting to get their goods within an hour, they pony up S$9.99 per order.

“Prime Now is Amazon’s fastest delivery method yet,” Henry Low, director of Prime Now for Asia Pacific at Amazon, told CNBC. “What we’ve done is we have looked at what our Singapore consumers love to have … (and) we’ve worked with hundreds of local vendors and made (them) available.”

Though Prime Now is a service that is available only to Prime members, Low said Amazon was making this available to non-members in Singapore for a limited period of time, letting customers try the service for free. He also said that the company was working to launch the Amazon Prime membership service soon in Singapore, but he declined to specify a timeline.

Amazon’s entry into Southeast Asia had been heavily anticipated since it was first reported last year. Analysts said Singapore’s relative affluence and westernization, as well as good infrastructure, made the country a prime candidate for Amazon’s expansion.

“The primary reason Amazon picked Singapore as its first market in Southeast Asia is due to the fact that consumers here are more westernized and affluent, and many of them are already shopping overseas,” Xiaofeng Wang, a senior analyst at market research company Forrester, said in a statement.

The foray into Singapore also sets up the stage for a potential showdown between Amazon and Chinese tech rival Alibaba, which recently took a controlling stake in regional e-commerce company Lazada.

“What’s brewing is a war, a massive face-off between Alibaba and Amazon,” Ken Mandel, president for innovation and commerce in Asia Pacific at Publicis Media told CNBC. “Because Alibaba owns Lazada, they are going to certainly be a force to be reckoned with.”

Earlier this month, CNBC spoke to Lazada co-founder Aimone Ripa di Meana who said the company was confident about taking on Amazon’s eventual expansion into Southeast Asia. According to Meana, Lazada’s advantages include on-the-ground knowledge about each of the six regional markets in which it operates, an extensive logistics network and backing from Jack Ma.

Southeast Asia is a lucrative market for e-commerce as millions of first-generation internet users are starting to embrace online shopping. A frequently cited study from Google and Singapore investment firm Temasek Holdings predicted the region’s internet economy to grow to $200 billion by 2025, driven mostly from growth in e-commerce.

Its proximity to China, which has already become a leading market for e-commerce, also makes the region Alibaba’s “backyard,” according to Forrester Senior Forecast Analyst Satish Meena.

“[Alibaba wants] to be the major player in this market, beating Amazon. When it comes to a direct battle between these two, Alibaba doesn’t have many countries left where they can actually take a lead,” Meena told CNBC, adding that those markets are still at a relatively early stage of development for e-commerce.

But Low said Amazon isn’t thinking about what its competitors are doing. Instead, the company’s focus is on consumers, he said.

“We look at what customers and consumers would like to have, and then from there on we would develop and invent systems and products which will solve customer problems. In the Prime Now case, it’s really the convenience angle they were trying to solve,” he said.

Low declined to say what Amazon’s next market could be in the region.

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