Ecommerce major, Amazon has said it will cut down Prime’s shipping time to a single day from two-day shipping guarantee. The company has further estimated to invest approximately $800 Mn towards this program.
Speaking at Amazon’s Q1 FY 2019 earnings call, Amazon Inc CFO Brian T. Olsavsky said, “We have been offering obviously faster than two-day shipping for Prime members for years and we are going to continue doing that. But this is all about the core free two-day offer morphing into a free one-day offer.”
Olsavasky said that the company’s ability to deliver this offering is based on Amazon’s more than 20 years of efforts in the expansion of its fulfilment and logistics network. The programme will start in North America but the company intends to expand the service globally.
“In the past month, we have significantly expanded our one-day eligible selection and also expanded the number of zip codes eligible for one-day shipping. So we’re taking a significant step. However, we will have to wait for Q2 end to comment on the scale and reach of this improvement,” Olsavasky added.
The company also claimed that they have had more people sign up for Prime in 2018 than any other year before. Also, the prime program engagement including order shipping, hours watched on video, hours listened to music, all are said to be trending in the right direction.
“Further, investment in one-day shipping is directly going to be a cost that we bear and it’s also going to be a direct benefit to sellers as well Prime eligible selection in our warehouses.”
Amazon’s Growing Presence In India
As of April 2018, Amazon India had 67 fulfilment centres across 13 Indian states. Also, Amazon Prime was the most-viewed over-the-top (OTT) video streaming platform in India for the period between February 12 and March 3, this year, as per a survey done by Velocity MR, a market research and analysis company.
In February, Amazon’s shares fell by 5.38% to $1,626.23, losing $45.22 Bn in market capitalisation. At present (April 26), Amazon is currently trading at its seven-month high at $1902.25 per share.