From the shareholder letter:
13 years post-launch, we have exceeded 100 million paid Prime members globally. In 2017 Amazon shipped more than five billion items with Prime worldwide, and more new members joined Prime than in any previous year – both worldwide and in the U.S. Members in the U.S. now receive unlimited free two-day shipping on over 100 million different items. We expanded Prime to Mexico, Singapore, the Netherlands, and Luxembourg, and introduced Business Prime Shipping in the U.S. and Germany. We keep making Prime shipping faster as well, with Prime Free Same-Day and Prime Free One-Day delivery now in more than 8,000 cities and towns. Prime Now is available in more than 50 cities worldwide across nine countries. Prime Day 2017 was our biggest global shopping event ever (until surpassed by Cyber Monday), with more new Prime members joining Prime than any other day in our history.
It was the first time Amazon revealed subscriber numbers behind the $99-a-year program, which is a pillar of Amazon’s success. Prime members spend more on Amazon: $1,300 a year vs. $1,000 for non-Prime members, according to data from Consumer Intelligence Research Partners. They are also intensely loyal, with renewal rates that exceed 90% (some of that may be thanks to Amazon’s auto-renewal policy). With 100 million paid subscribers, Amazon is making in the range of $9.9 billion a year from Prime membership fees alone, though prices vary around the globe.
As it continues to grow Prime, Amazon’s challenge, particularly in established markets like the US, is to make the program appeal to less wealthy households. Analysts believe the company may struggle to attract users who earn less than $75,000 a year. Amazon has already started to tackle this problem, both with a monthly Prime membership ($12.99) and a discounted Prime program for low-income Americans ($5.99 a month). Amazon is also aggressively pursuing new users outside the US, and last year expanded the service to Mexico, Singapore, the Netherlands, and Luxembourg.
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