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Inside Amazon’s Prime Program: Still Going Strong?

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Feb. 22 2018, Updated 7:31 a.m. ET

Prime subscription goes for $99 a year or $12.99 a month

In keeping with tradition, Amazon.com (AMZN) discussed exciting progress in its Prime membership program during its 4Q17 earnings call—without disclosing exactly how many people have signed up for the program. Data from Consumer Intelligence Research Partners, however, show that Amazon has more than 90 million Prime subscribers in the US, where the membership program costs $99 per year, or $12.99 per month.

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Prime memberships continued to grow in 4Q17 as well as in calendar 2017, and the recent integration with Whole Foods could help draw more people to the program in the US. Amazon is bringing Prime Now to Whole Foods shoppers, allowing them to receive their orders within two hours, without any additional costs or within one hour at an extra cost of $7.99 per order of at least $35.

Amazon records Prime milestone in India

Since Prime subscribers typically spend more on Amazon purchases than regular shoppers, Prime has become a closely watched Amazon offering. Amazon has now introduced Prime in several overseas markets, and it hopes to launch it in more countries as it broaden its global expansion.

The introduction of Prime in India, for instance, was met with a milestone outcome. According to the company, it added more Prime subscribers in India in the first year of the program than it has ever seen in any other country.

Building a loyal customer base

The fees that Amazon collects from its Prime subscribers are reported under subscription services revenues, which came to $3.2 billion in 4Q17—up 49% on a YoY (year-over-year) basis, as shown in the chart above.

Besides its fees income, Prime is also a loyalty program that is helping the company build a stable base of customers. Amazon will need more loyalty from its customers as it moves to challenge Wal-Mart Stores (WMT) and Costco Wholesale (COST) in the US grocery market and tackles overseas rivals such as Alibaba (BABA), JD.com (JD), and India’s Flipkart.

Continue to the next part of this series for more on Amazon in India.

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