Last Thursday, Amazon launched its same-day delivery service, Prime Now, in Singapore; marking its first launch into the Southeast Asia market. With Prime Now Singapore shoppers can now order goods, ranging from groceries to consumer electronics, and have them delivered within two hours. The app has been available for download since last Wednesday night in Singapore on both Google’s Play and Apple’s App stores. Amazon has also set up a 100,000 sq ft facility in Singapore; its largest warehouse in an urban center.
“This is the first time we’re offering Prime Now to an entire country. Singapore allows us to launch to the whole country at the same time, but when you look at the Singapore consumer, at Singapore — it being urban, a great metropolitan city, people are very tech-savvy, it makes a great match with the Prime Now value proposition,” Amazon’s Director of Prime Now in Asia Pacific, Henry Low, told CNET in an interview.
The service, which is available to Singapore’s population of more than five million people, includes tens of thousands of items, but is not the full Prime offering, which Amazon has said will be available soon.
Amazon’s delivery service will take on the already existing service provided by Alibaba. Alibaba recently took a controlling stake into the right already established e-commerce site, Lazada, which dominates the market in Asia. Lazada offers a subscription service similar to that of Amazons Prime, as well as grocery deliveries via Redmart; a service it acquired last year. However, Redmart takes a minimum of one day to fulfill orders it receives.
In an attempt to woo users, Amazon is offering deep discounts for users who sign up early. For a limited time, customers will be able to try the Prime Now service without having a Prime membership. Delivery is free for orders above S$40 ($29.34); orders below S$40 users will pay a S$5.99 delivery fee. Also included is an option for one-hour delivery, with an additional charge of S$9.99 ($7.33).
“Prime Now is Amazon’s fastest delivery method yet. 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 [have] made [them] available,” Low told CNBC.
Southeast Asia, which has a population of ~600 million, is seen as an untapped market with potential for a variety of online services. According to a 2016 report from Google and Singapore’s sovereign fund Temasek, e-commerce in the region is projected to grow from a $5.5 billion to $87 billion by 2025.
“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,” senior analyst at market research company Forrester, Xiaofeng Wang, said in a statement.
Amazon has yet to reveal what its ultimate plans are for the Asian market, but with its entry into Singapore the signs of expansion are clear. What is also clear will be the rivalry between Alibaba and Amazon to become the dominant e-commerce site in the Asian market.
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