Strategy: Amazon is pushing Prime Day into China and India – but it's facing an uphill battle (AMZN)

Amazon has announced its annual Prime Day promotion will run for 30 hours this year from the night of July 10 through July 11.

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Amazon has announced its annual Prime Day promotion will run for 30 hours this year from the night of July 10 through July 11, VentureBeat reports.

The promotion, which provides special discounts on a wide array of items for Amazon’s Prime subscribers, will also run in new countries, including China and India.

Amazon hopes to boost the number of Prime subscribers in India and China in order to grow its overall footprint in those markets. The company offers a one-time 30-day free trial of Amazon Prime for new customers who sign up to participate in the bevy of exclusive sales. Drawing in new Prime subscribers helps Amazon capture more sales year-round, as Prime subscribers spend almost twice as much with Amazon, on average, than non-Prime members.

Boosting its Prime member base in China and India would therefore give Amazon a critical tool in capturing more revenue in these countries:

• Amazon has made a concerted effort to expand in China, but hasn’t fared well there. Market leaders Alibaba and JD.com took about 57% and 25% of Chinese retail e-commerce in 2016, respectively, while Amazon came away with a little under 1%.
• The company has committed $5 billion to growing its business in India, where it's locked in a close battle with domestic player Flipkart for the lead position in the market.

Prime Day may have mixed results in these new markets, however. Given Amazon’s minuscule market share in China, it could be difficult to leverage Prime Day to draw in more subscribers, particularly if Chinese consumers are unfamiliar with the program to begin with. India offers a better opportunity, as Amazon is one of the most visible e-commerce companies there, and it may be able to leverage its mobile app to attract Indian subscribers.

Prime Day brings huge traffic to Amazon’s mobile app in the US — 1 million new customers used its app last year, and characteristics in the Indian market could enable it to replicate that success. A huge portion of India’s e-commerce is conducted through mobile, which makes up around 80% of web traffic for Indian competitors Flipkart and Snapdeal.

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posted by ConnectMe