Big Loyalty Moves in the Little Red Dot: Amazon Prime Now enters the grocery delivery space
Amazon Prime Now has arrived in Singapore! After months of rumours and speculation amidst a launch delay, Amazon Prime Now is loud, proud and trying to take charge in the e-commerce delivery space where home-grown players like HonestBee and RedMart have had a longer head start.
Nevertheless, it’s caused a stir among excited consumers who were chomping at the bit to take advantage of 2-hour delivery when they launched last Thursday, the 27th of July. That is, until, their delivery slots were fully booked – and stayed fully booked until midday on Sunday. To make the first-time buyer deal sweeter, a Visa cardholder promo code was offered: get $20 off any purchase above $40 – but many logged in just to find out that the offer had already been fully redeemed. We’re sure that it’s just teething problems and can only take this as a healthy sign of the demand.
Amazon Prime Now is NOT Amazon Prime
For US $99 a year, Amazon Prime offers buyers free 2-day shipping on items from the marketplace, unlimited streaming of movies and TV from Prime Video and to buy books with Kindle Unlimited. This is not what’s offered here in Singapore.
Amazon Prime Now is a mobile-based platform that allows users to make grocery, electronic and household purchases through a mobile device, and be eligible for free 2-hour delivery for purchases above SGD $40. It’s is not a membership nor a loyalty program, and is available to all users in the regions they’ve launched in: for now, major cities in the US, some parts of Central London and Singapore have access to the platform.
As the American juggernaut moves in, the competition has spent months shoring up efforts to lock in loyalty in Singapore.
3 months before Amazon Prime Now launched in Singapore, the market saw a concerted effort from major local players to create a program that locks people in – no doubt in anticipation of the introduction of Amazon Prime (or Prime Now) in the region. This group of established players are most definitely getting a head start on signing customers who would also be in Amazon Prime’s sweet spot.
In April 2017, Lazada, Taobao, RedMart, Netflix, Uber and UberEats partnered to launch The LiveUp Program. For SGD $28.80 per year, members get members-only perks like a 5% rebate on Lazada, free delivery options on Redmart and UberEats, 6 months of Netflix and free Uber Rides. LiveUp’s customer loyalty platform is unparalleled and with this savvy move, LiveUp has pre-emptively laid claim to a territory that Amazon Prime Now (and in future Amazon Prime) owns in other parts of the world.
There is room for more than one player.
Despite having two major players, the digital superstore space is still small, with research showing that online grocery sales only make up 1-2% of the entire grocery market. Having only two major players in the market will only help deliver more value to consumers in a marketplace that still has huge potential to grow – especially with customer loyalty.
No doubt, industry insiders will be watching this space unfold as the competition for loyalty/retention in the digital space is fierce. We expect that Amazon will come forward with Amazon Prime soon, offering a 2-day delivery from the Amazon Global Marketplace – and then we’ll see the real competition between two major lifestyle loyalty players begin.
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