Amazon Prime Doubles in Size in Two Years, Over 25% of Subscribers Paying Monthly Already

Amazon Prime Doubles in Size in Two Years, Over 25% of Subscribers Paying Monthly Already

Amazon’s e-commerce business is increasingly tied to Amazon Prime. Amazon’s success in new markets like India depend in no small parts on the popularity of Prime in those markets and, last not least, Prime is –already– the moat around Amazon’s business in its home market, the US.

Unfortunately, Amazon never once said how many Prime subscribers the company has amassed.

So, we have to rely on third-party reports. On research firm tracking Prime for several years now is Consumer Intelligence Research Partners (CIRP). CIRP’s recent report suggests 80 million Prime members worldwide at this date.

Yahoo Finance / BI Intelligence:

Amazon’s Prime membership program now counts 80 million members worldwide, up from 63 million last June, according to new estimates from Consumer Intelligence Research Partners (CIRP).

Not surprisingly, CIRP again confirms that Prime members use Amazon even more as the default shopping destination than non-Prime Amazon customers:​

Unsurprisingly, the study found, Prime members tend to spend more with Amazon than non-Prime members. Prime members spend $1,300 per year with the e-commerce giant, on average, compared with $700 for non-Prime members.

​However, Prime is still, like Amazon, a US-centric story, with a lot of growth potential in over markets:

Prime’s growth has been mostly concentrated in the US, where the total number of Prime members reached 58 million at the end of Q1 2017, a 38% year-over-year (YoY) increase, according to CIRP. That means 60% of Amazon’s US customers now have Prime memberships. Prime’s rapid adoption in the US has been a transformative force in the retail market, driving up Amazon’s revenue and market share, while department stores and big box retailers suffer declining sales and foot traffic.

However, Prime has seen slow adoption in other countries, making Amazon’s retail business very reliant on its home market.

The other markets (mainly Canada, India, UK, Japan and Germany) amount to only about 22 million of those 80 million according to CIRP.

Here is another interesting note via the press release from CIRP (PDF):

“The monthly payment plan proved attractive, even thought it costs more than the annual plan,” continued Lowitz. “We think that the monthly membership option appeals to the later Prime adopters, with a smaller, potentially temporary commitment, that ultimately yields a long term commitment. With smaller dollar, single month decisions, the new plan winds up helping with retention rates, which already average 85% for a member renewing after their first year.”

This is extraordinary and suggests a lot of room to experiment in for the whole e-commerce industry when it comes to monthly paid-for bundles and accompanying services.

“Looking back, Amazon Prime membership doubled in the US in two years,” said Josh Lowitz, Partner and Co-Founder of CIRP. “While slower growth is expected as it reaches natural limits, Amazon had a surprisingly strong quarter. Membership grew 8% in the most recent quarter, compared to 7% growth on a smaller base in the year-ago quarter ending in March 2016.”

One caveat. The sample size at CIRP is not that large:

CIRP bases its findings on surveys of 500 US subjects who made a purchase at in the period from January-March 2017.

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