Amazon Unveils Prime In Australia At Half-Price; Will Australian Consumers Respond? | Forbes

Amazon launched Prime this past week in Australia at half the price it charges in the U.S. For $6.99 AUD (or about $5.15 USD)  a month or $59 AUD a year (or just under $44 USD), Australians will now be able to get free two-business day delivery on some products and access to videos, e-books and gaming.

The bargain basement pricing strategy suggests that Amazon is looking to quickly jumpstart subscriptions Down Under and is clearly planning to be in Australia for the long haul. However, Amazon in Australia is not quite the Amazon we know in the states. Unlike the 480 million products available in the US, amazon.com.au has only about 60 million products for sale, and a lot of those products are sold by third-party sellers and thus are not eligible for free two-day shipping.

Will the Aussies jump aboard the Amazon bandwagon and radically change the retailing landscape? The answer is not clear.

On one hand, if Amazon’s very low prices incent Aussies to try out Prime, they may learn as Americans did, that shopping on Amazon is compelling and habit forming. The younger consumers are more likely to sign up as studies have shown that 69% of Gen Z consumers in Australia are engaging in mobile shopping as a leisure activity. Amazon’s entertainment content and convenience is likely to be a big draw.

On the other hand, several factors in Australia suggest that the ultimate success of Amazon prime may not be so straight forward. First, as mentioned above Amazon Prime in Australia will not be the same as in America in terms of products offered and delivery options available. And Amazon has geo-blocked access to amazon.com because of the introduction of GST (goods and services tax) on overseas orders worth less than $1000. If shoppers’ expectations for Amazon prime exceed the actual experience, shoppers will be disillusioned. Aggressively pricing Amazon Prime before the shopping experience is perfected may then backfire.

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Amazon Unveils Prime In Australia At Half-Price; Will Australian Consumers Respond?.