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Amazon's E-commerce Presence Expands With Prime Launch in UAE

Zacks Equity Research

In order to strengthen presence in the Arabian Peninsula, Amazon AMZN has rolled out Prime services in the United Arab Emirates (UAE).

The company expanded e-commerce operations in the UAE just a month ago by launching Amazon.ae. Amazon Prime and its customer friendly services will help the e-commerce giant in enhancing customer experience in the country.

Notably, the service is available in both monthly and yearly subscription at Dh16 and Dh140, respectively. Further, Prime 30 days free trial has also been made available in the country.

Additionally, Amazon is providing Prime monthly subscription at Dh12 as an introductory offer till the end of October 2019.

Prime Benefits: A Key Catalyst

The Prime members in the UAE will now enjoy 50 percent discount on same-day delivery of several products in cities like Sharjah, Al-Ain, Dubai, Abu Dhabi and Ajman.

Further, members will be able to avail free next day delivery across the country with no minimum purchase.

Domestic products eligible for Prime delivery include – electronics, books, toys, fashion and beauty from the brands such as Black & Decker, Samsung, Guess, Bosch, HP, Philips, Friskies, Maybelline New York, Gillette, Lego, Sony, Nike and Pampers, to name a few.

Additionally, brands eligible for international orders include Timberland, US Polo Assn, Crocs, Invicta, Ray-Ban, Ted Baker, Clarks, Diesel, Philips, Samsonite and Sandisk, to name a few. Further, customers will also be able to avail free delivery in 6 to 9 business days for international orders worth more than Dh100.

Furthermore, shoppers joining Prime will also be able to avail special deals and benefit significantly by shopping on Prime Day.

Apart from these shopping benefits, Amazon will provide UAE Prime member access to original series, movies and award-winning shows of Prime Video. Moreover, they will be able to avail Twitch Prime.

Amazon.com, Inc. Revenue (TTM)

 

Amazon.com, Inc. Revenue (TTM)

Amazon.com, Inc. revenue-ttm | Amazon.com, Inc. Quote

UAE Holds Promise, Growing Global Presence

We believe the above-mentioned customer benefits will aid Amazon in attracting customers to UAE e-commerce platform. Further, these benefits will aid growth of Prime membership which in turn will drive the top line.

Moreover, with its strong endeavors, Amazon is likely to rapidly penetrate the e-commerce market of UAE which as per a report from Statista is expected to generate revenues of $3.6 billion in 2019 which is anticipated to hit $4.2 billion by 2023.

Further, user penetration in this market is pegged at 89.4% and 92.7% for 2019 and 2023, respectively.

Further, the latest move of Amazon bodes well for its continued focus toward expansion of Prime’s global footprint. Currently, the service is available in 17 countries which includes the United States, Australia, India, Netherlands, Singapore and Luxembourg, to name a few.

Notably, rapid expansion of Prime in international regions will continue to aid Amazon’s dominance in global e-commerce space.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector worth considering are Rosetta Stone RST, PayPal Holdings, Inc. PYPL and Nuance Communications, Inc. NUAN. While Rosetta Stone sports a Zacks Rank #1 (Strong Buy), PayPal and Nuance Communications carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Rosetta Stone, PayPal and Nuance Communications is pegged at 12.5%, 17.91% and 5%, respectively.

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