uploads///Amazon prime rev growth Q

Amazon’s Prime Membership Rate Hike May Be Paying Off

By

Updated

Amazon generated $4.34 billion in subscription revenue in the first quarter

Amazon (AMZN) announced last April that it had over 100 million Prime members globally. The e-commerce giant also announced a hike its Prime membership rate in the United States from $99 to $119 annually, which went into effect in the second quarter of 2018.

Amazon’s revenue from subscription services, which includes its Prime subscription revenue, came in at $4.34 billion in the first quarter of 2019, a rise of 40% YoY (year-over-year). This segment saw accelerated growth in the first quarter after it grew only 26% YoY in the fourth quarter of 2018.

Article continues below advertisement

Amazon is ramping up its services under its Prime membership

Since revealing its Prime membership figure in April 2018, Amazon hasn’t disclosed the number again. However, the hike in the Prime subscription rate in the United States last year may be paying off given its robust growth despite a mature US market (the company’s most important market).

Amazon Prime members tend to spend a lot more money on Amazon’s platform than its regular customers do. Hence, if its Prime membership base grows, the increase will have a positive impact on its subscription revenue, and its core business will also get a boost.

Amazon has been increasing the benefits it offers to its Prime members ever since it hiked the subscription rate. The company is now working on making one-day delivery the standard for Prime members.

Advertisement

More From Market Realist