Amazon tops 100 million Prime members
Amazon.com Inc. chief executive officer Jeff Bezos said the e-commerce giant has exceeded 100 million paid Prime subscribers and will continue to invest to meet “ever-rising” customer expectations.
Bezos noted the milestone in his annual shareholder letter, published on Wednesday. The letter is the founder’s opportunity to underline his long-term strategy for investors, seeking to bolster their confidence as he continues to plow Amazon’s money into expanding internationally, building a brick-and-mortar presence, and inventing new products like Echo speakers and the Alexa voice-activated digital assistant.
Prime subscribers pay monthly or annual fees in exchange for quick delivery of online orders, music and video streaming and free online photo storage. The memberships encourage consumers to shop more with Amazon to get their money’s worth, similar to warehouse clubs like Costco Wholesale Corp. Amazon took its memberships a step further with additional digital perks, and sells add-ons like a more robust music catalog for an additional monthly fee.
Amazon has kept its Prime subscriber number a closely held secret, forcing analysts to estimate the figure based on shopper surveys.
Bezos’s comments show that Seattle-based company is selling Prime memberships overseas, demonstrating it can replicate its US success abroad, said R J Hottovy, analyst at Morningstar Inc. Amazon is losing money with its international expansion, but investors will be patient if the company is gaining Prime subscribers, he said.
“What we’re seeing in Europe and other markets is similar to what we saw in the US between 2010 and 2014,” Hottovy said. “People see value in Prime memberships in terms of shipping speed and content. It’s important to investors because membership retention rates are north of 90%.”
Bezos cited Amazon’s continued high marks from independent surveys, including the American Customer Satisfaction Index, as proof that the company continues to invent new ways to please customers, giving them new things they didn’t realize they wanted. “You cannot rest on your laurels in this world,” he wrote. “Customers won’t have it.”
The letter praises Amazon’s corporate culture, with Bezos maintaining that high standards are “teachable”.
“People are pretty good at learning high standards simply through exposure,” he said. “High standards are contagious. Bring a new person onto a high standards team, and they’ll quickly adapt. The opposite is also true. If low standards prevail, those too will quickly spread.”
The CEO also said that in 2017 Amazon shipped more than 5 billion items with Prime worldwide and more new members joined Prime than in any previous year. He added that 2017 was best year for hardware sales and that the company will continue to invest aggressively to expand its customer base, brand and infrastructure.
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