Amazon.com Inc. is kicking off in Singapore with its most aggressive service yet, offering the Prime Now two-hour delivery service on everything from chilled Tiger beer to Samsung mobile phones.
Customers in Singapore can shop using the Prime Now app and get tens of thousands of items delivered to their door with free delivery on orders of more than S$40 ($29), according to Henry Low, director of Amazon Prime Now, Asia Pacific.
Amazon’s entry into Southeast Asia could spark fierce competition with Alibaba Group Holding Ltd., which has acquired control of Lazada Group SA and is said to be considering an investment in Indonesia’s PT Tokopedia. The region of 620 million people is home to an e-commerce market forecast to reach $88 billion by 2025, according to a report by Google and Temasek Holdings Pte.
“Southeast Asia is a burgeoning marketplace for us with more than 600 million consumers, growing wealth and digitization,” Low said in an interview. “I’m super optimistic with opportunities that we have. This is day one.”
The U.S. e-commerce giant has been stepping up its overseas expansion. Having largely ceded China to Alibaba, the Seattle-based firm is waging a war of attrition with Flipkart Online Services Pvt in India, where it has pledged to spend $5 billion in the next few years. In March, Amazon agreed to buy Dubai-based online retailer Souq.com.
Amazon will always evaluate deal opportunities, Low said, declining to comment on its road map for regional expansion.
“Together, Amazon and Alibaba are set to create an unprecedented disruptive force,” said Raghav Kapoor, an analyst at Smartkarma.
In Singapore, Amazon and its rivals are betting on the growth of online retail. E-commerce accounted for just 0.9 percent of the city-state’s retail market in 2003 before rising to 4.8 percent last year, according to data compiled by Euromonitor.
Amazon’s Prime Now service will be available for trial for free for a limited time in Singapore, before the company rolls out its Prime membership program, Low said. It’s the first time the service has been offered on debut in a new market. In other cities, it’s a prerequisite to be a Prime member to get the two-hour delivery service.
The company will also offer a one-hour expedited delivery service for S$9.99 per shipment.
Amazon’s Prime Now in Singapore will operate out of an urban fulfillment center, a facility of around 100,000 square feet, the company’s largest Prime Now only fulfillment center in the world, Low said. He added that the company plans to hire hundreds of people in Singapore as it expands services.