NEW DELHI: Amazon Prime, the subscription-based service from the American e-commerce giant, which offers next-day delivery, on-demand video and audio content, and special offers and discounts to buyers, is shaking up the Indian e-commerce business.
Snapdeal, which was pipped by Amazon this year, launched Snapdeal Gold on Monday. It’s not that Snapdeal did not offer next-day-delivery earlier, but that came at a cost of ₹99 – now it is free. Amazon is offering a 60 days free-trial for Prime, which was launched last month.
Snapdeal’s service, though free, is available only on prepaid orders, and not on cash-on-delivery. It has five million products for its Gold members.
“Comparing Prime with Gold is like comparing apples with oranges… We learnt that Indians do not like to pay subscription fee. We do not want people shopping on Snapdeal to worry about quality of products or time of delivery,” said Rohit Bansal, co-founder of Snapdeal.
According to Consumer Intelligence Research Partners, globally Prime users spent an average of about $1,200 per year in April-June 2016, while non-Prime users bought goods worth $500.
However, offering a Prime-like service free-of-cost will burn into funds, taking Snapdeal’s focus away from its new revenue-centric approach. “It does cost a little more, but that is customer acquisition cost,” said Bansal. He hopes to even it out in the long-run as volumes increase.
{{/usCountry}}However, offering a Prime-like service free-of-cost will burn into funds, taking Snapdeal’s focus away from its new revenue-centric approach. “It does cost a little more, but that is customer acquisition cost,” said Bansal. He hopes to even it out in the long-run as volumes increase.
{{/usCountry}}Flipkart, too, isn’t far behind. It started Flipkart First in 2014. This month it launched F-Assured, a service that promises 2-4 days delivery for orders worth above ₹500. But Snapdeal Gold and Flipkart First do not offer on-demand audio and video.
ShopClues and Paytm are yet to launch such membership services. Also data generated by Prime users, consuming various services, can be analysed and Amazon can further push more advertisement and products.