In 2015, when Amazon introduced Prime Day, its deal-driven shopping event for Prime subscribers, the company offered it in nine countries.
This year, when Prime Day takes place June 21 and 22, 20 countries will take part in the event, which has grown into a two-day shopping bonanza. The number of countries would have been greater, but Amazon decided to postpone Prime Day in Canada and India due to Covid-19, saying it would reveal further details later.
Prime Day has become vital to Amazon’s business, and not just for the two days it takes place. It’s become a critical way Amazon signs up new Prime subscribers, locking them into its ecosystem, where they continue to spend for the whole year. In 2019, Amazon boasted Prime Day saw more new sign ups than any other time in its history. Increasingly, those sign ups are happening outside the US, helping to fuel Amazon’s rapidly growing international sales.
Amazon hasn’t revealed a breakdown by country of Prime subscribers, but eMarketer, a part of digital research firm Insider Intelligence, estimates the number of households signed up for Amazon Prime has been growing faster outside the US than in it. That’s probably in part because Prime is close to saturating the US market, with about 65% of US households subscribed to Prime in 2021, according to eMarketer’s data. In other countries, Amazon may only just be taking off, giving it plenty of room to grow.
Prime Day is crucial to that expansion. “It’s like free marketing, a free acquisition platform for Prime members,” said Cindy Liu, a forecasting analyst at eMarketer. “They have a lot of recognition around the event.”
The benefits Amazon offers with Prime vary by country. In the UK and parts of Europe, the grocery offering is a main attraction. But one feature it has used as a spearhead to establish Prime in new markets is video streaming. Liu explains that international markets generally don’t have the variety of streaming services available in the US. The lack of competition provides Amazon with a way in, which it can then use to start introducing its other Prime services.
“There’s great examples of places like Brazil, where you launch a video-only subscription, for example, that preceded the broader Prime membership with shipping components,” Dave Fildes, Amazon’s director of investor relations, said during an April earnings call. He described it as a way to expose new customers to Amazon, and then when the company launched its broader Prime program in Brazil, “it was a great mechanism to [get] folks into that program,” he said.
He also noted customers are more likely to subscribe to Prime after their 30-day free trial if they stream video. And of course once they sign up, they’ll likely spend on Amazon for the rest of the year. It’s little wonder Amazon recently paid $8.5 billion to acquire film studio MGM, giving it a historic library of content to offer subscribers.
This Prime Day, Amazon is advertising the event as offering “the best in entertainment benefits and never-before-seen exclusives across Prime Video, Amazon Music, Prime Gaming, and more.” And there will be plenty of other deals too, not just in the US, but in China, Mexico, Japan, Italy, Turkey, Saudi Arabia, and many other countries.