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Amazon.com, Inc. (AMZN) Launches Free Shipping For Prime Members in China

Amazon.com (AMZN) Amazon

Amazon.com, Inc. has launched its Prime free-shipping service in China on Friday, CNN reported. The online retailer is offering Chinese Prime members free shipping for overseas items on orders exceeding 200 yuan and free shipping on domestic orders with no minimum purchase. In the world’s most populous country, the company is offering the Prime membership for 388 yuan ($57), less than two-thirds of the $99 price tag for Prime in the U.S. The company launched Prime in China just two weeks before Singles’ Day, the annual online shopping festival whose sales exceed those of Black Friday and Cyber Monday in the U.S.

Amazon Prime

The Prime membership service provides members with free shipping on qualifying orders, faster shipping times, unlimited movies streaming, unlimited music streaming, and access to audiobooks.

Amazon.com, Inc (AMZN)

The Prime service has 60 million subscribers, including 41 million from the US, according to Morgan Stanley. A report from Consumer Intelligence Research Partners shows that the online retailer increased its total US Prime membership by 19 million since July 2015. The report, released in the second quarter this year, showed that the online retailer has a total of 63 Prime members in the US, up from 44 million members since the end of the second quarter in 2015.

Morgan Stanley said in a recent that AMZN will inch closer to the $1,000 mark due to Prime’s surging popularity. The firm told its clients that it’s time to buy even more shares in the online retail juggernaut.

According to CNN, it’s not clear whether the company’s Prime package in China will include the online video and music streaming services.

Prime Won’t Be Game Changer in China

Alibaba is a big player in the Chinese e-commerce market. Analysts say that “Amazon still remains a minor player in China’s e-commerce landscape, falling well short of domestic powerhouse Alibaba,” CNN reported. They believe that Amazon Prime is unlikely to change the game, but it could bring new business for the company from China’s growing middle class.

“If they can offer products and brands the other guys aren’t, this could really work for them,” Ben Cavender, a senior analyst with China Market Research Group in Shanghai, said, CNN reported. “They have so much data about what goods are popular overseas, they may be able to anticipate what products will be popular … in China.”

Sandy Shen, e-commerce research director at Gartner, isn’t impress with Amazon’s Prime program in China. The analyst said that competitors are already offering free shipping for overseas goods without annual membership fees.

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