In a letter to shareholders on Wednesday, Jeff Bezos (pictured in Beverly Hills, California, on March 4) wrote of the need to maintain ‘high standards’ to keep pace with customers who are ‘divinely discontent’
Jeff Bezos has revealed Amazon Prime now has 100 million members globally – the first time he has disclosed the figure.
In a letter to shareholders on Wednesday, the retail giant’s CEO wrote of the need to maintain ‘high standards’ to keep pace with customers who are ‘divinely discontent’.
Amazon shipped more than five billion items through its Prime service last year, and logged an unprecedented number of new memberships, according to Bezos.
Subscriptions to Prime, which launched 13 years ago, cost $99 in the US, and come with fast, free shipping as well as online access to movies and television shows.
The Seattle-based company has been investing heavily in original television content, releasing shows including hit series The Man In His High Castle and Top Gear remake The Grand Tour.
‘Prime Video continues to drive Prime member adoption and retention,’ Bezos said in the letter. ‘We’ve expanded our slate of programming across the globe.’
In January the company raised the monthly Prime subscription price in the US to $12.99 from $10.99, but left the annual cost at $99.
The scope of Prime’s success stunned even the most optimistic of analysts, such as GBH Insights’ Daniel Ives. He had previously estimated Amazon had 92 million Prime subscribers.
Amazon shipped more than five billion items through its Prime service last year, and logged an unprecedented number of new memberships, according to Bezos
‘It’s a mind-boggling number that serves as a key barometer to how big Amazon’s kingdom has become,’ Ives said. Amazon shares were up 1.5 per cent in after-hours trading.
Prime members typically spend twice as much at Amazon than non-Prime members, and have access to the site’s video streaming service.
It also helps spur sales of Amazon’s internet-connect speaker with device makes it easier to shop online and gives the company a toehold in homes.
A graph showing Amazon’s changing stock price, which rose by 1.5 per cent in out of hours trading after Bezos’ announcement
Amazon also is leveraging Prime to spur more sales at Whole Foods, the brick-and-mortar supermarket chain that it acquired last year, by offering two-hour delivery of groceries to the service’s subscribers.
Prime serves as a ‘competitive moat’ that makes it more difficult for other retailers, online and offline, to get people to shop at their stores instead of Amazon, Ives said.
‘It has become a golden ticket for Amazon,’ he said.
President Donald Trump attacked Amazon as an economic scourge, deriding the company as a tax dodger and an abusive customer of the US Postal Service
All those factors have helped make give Amazon a market value about $740 billion. Only Apple, at about $900 billion, and Google’s corporate parent, at about $745 billion, are currently worth more.
Prime’s rabid success has attracted some negative attention of late.
President Donald Trump attacked Amazon as an economic scourge, deriding the company as a tax dodger and an abusive customer of the US Postal Service.
That has raised worries the Trump administration might take action that could crimp Amazon’s growth.
Meanwhile, Amazon still isn’t the king of digital subscriptions – conceding that title to Netflix.
The streaming site has 125 million worldwide subscribers who, on average, pay about $120 annually.
Amazon, on the other hand, has more than 560,000 employees, and reported a profit last year of slightly more than $3 billion.
The company on Wednesday also announced a collaboration with US consumer electronics retail chain Best Buy to sell Toshiba and Insignia smart ‘Fire’ televisions infused with Alexa.
‘Amazon and Best Buy have a long history of working together, and today we take our partnership to a new level,’ Bezos said in a joint statement.
Costco has been selling annual memberships to get bargains on goods stocked in its warehouses for decades, and already been outdone by Amazon’s Prime service.
Costco has 50.4 million memberships that allow 92 million cardholders to shop in its warehouse and website.