Amazon launched its Prime membership program in India on Tuesday at an initial annual cost of 499 INR, or about $7.50 per year, lower than the U.S. monthly price of $10.99. The initial price will later increase to 999 INR (around $15) per year, TechCrunch reports.
Discounted same-day delivery will be available to Prime members living in the country's major cities, such as Delhi, Mumbai, Bangalore and Hyderabad.
The initial launch excludes the company's Prime video service, although Amazon says on its site that access to Amazon original TV shows and movies is "coming."
The launch of Prime (even without video) will help bolster Amazon's standing in the fast-growing and competitive Indian e-commerce market.
The Prime membership program has been central to Amazon's ability to convert new customers to loyal ones. Stats show that Prime members spend about $700 more annually than non-Prime members, according to Consumer Intelligence Research Partners. Prime membership in the U.S. increased to 63 million by the end of June, up from 44 million at the same time last year, representing over half of Amazon's total American customer base, CIRP noted.
While Amazon has become a dominant force in e-commerce in the U.S., it faces fierce competition in India. Flipkart, which on Monday acquired Jabong to become India’s biggest online fashion retailer, is one of its primary competitors. Similar to Prime, Flipkart has a service called Flipkart First, which offers discounted one-day deliveries and fast free shipping. Amazon also faces competition in India from Alibaba, which has turned to India for overseas growth as growth prospects in China have cooled.
But Amazon CEO Jeff Bezos isn't one to shy away from competition. India is projected to be the biggest e-commerce market outside of the U.S. in the next decade, Fortune reports. “The size of opportunity is so large it will be measured in trillions, not billions—trillions of dollars, that is, not rupees,” Amazon’s Senior Vice President for international retail Diego Piacentini told Fortune earlier this year.
Amazon has already been betting big on India. In June, Bezos announced it was planning to invest $3 billion in Amazon India operations. Since entering the market in 2013, Amazon’s total investment in its e-commerce operations in India totals over $5 billion, eclipsing investments made by local e-commerce competition from Flipkart and Snapdeal, Mashable reports. To win in the Indian market, Piacentini told Fortune that Amazon will need to try innovative ideas it has never tried in other countries.
“We need great people, a great platform, and honestly, a lot of money,” he said.