10X Analysis: Amazon's Prime Day in the UAE
In the U.S., Amazon’s Prime Day was a startling success—the largest ever in the company’s history. Although, in the U.A.E. it fell short of expectations for customers.
However, for small and medium-sized enterprises, it was a great day.
Let’s begin with the good news: 50 per cent of the goods sold on Amazon’s Prime Day were through entrepreneurs, majority of whom run UAE-based SMEs, according to Ronaldo Mouchawar, vice president of Amazon MENA.
Prime customers bought more than 175 million items on the two days, spending more than $2 billion across 18 countries.
“Prime Members in the UAE enjoyed deals on thousands of items, and best-selling product categories in the UAE included health, beauty and perfumes, electronics, and grocery.”Ronaldo Mouchawar, vice president of Amazon MENA.
This gives immense insight into e-commerce business for SMEs.
Now regarding why Amazon was not meet customer expectations in the UAE.
First of all, Prime customers in the UAE did not receive as many deals as their U.S. counterparts. Even when it came to international delivery, there just weren’t as many deals available. The US had a much wider range of deals in the luxury beauty and electronics space compared to the UAE.
Next, people in the UAE are quite fond of good discounts, as is evident from the success of various shopping festivals and flash sales that have been known to offer up to 90 per cent discounts. As hyped as Amazon’s Prime Day was for discounted sales, for many the actual offers just did not seem as great for a one-time offer.
Moreover, noon offered multiple discounts—without any commitment for a premium membership—in addition to the free delivery it has started offering to everyone. Many discounts and offers on noon’s platform were thought of as better than those available through Amazon Prime.
“Noon offers better discounts in my opinion. Even during the Eid break noon offers much better deals than Amazon. I bought my mobile from noon at that time. I did not find anything really worth buying on Prime Day. The discounts seemed very normal, something you can easily find in Dubai.”Payal Kumar, Dubai resident
Even though the US market did see record-breaking sales on Prime Day this year, it also saw a bit surprising from new Prime membership recruits. While they saw many people signing up for Prime service availing free 30-day trial, many of them cancelled their subscription within a day or two, according to search-intelligence company Captify. In fact, the searches for "Canceling Amazon Prime" were 18 times as high Monday, 15 July, as they were the day before.
The new Prime customers signed up to check out the Prime Day deals, and perhaps even bought things as well using the service. However, they did not stay on, which is the ultimate aim of Amazon offering free 30-day trials for its Prime service. According to Amazon’s terms, those that did unsubscribe from the service after a day or two, would still be able to benefit from it for 30 days.
“We think carefully about how to customise and localise Prime in each country because we recognise that customer needs and expectations vary. For the UAE, these include things such as access to Amazon Prime Video so members can stream or download their favourite shows, exclusive deals, and free next day delivery.”Spokesperson of Amazon.ae
In all, noon is giving serious competition to Amazon. The latter needs to step up its offers and services for customers, especially in the UAE where they are becoming increasingly price-sensitive and expert bargain hunters. Although they have introduced revised seller terms across the world, to the benefit of SMEs, we wonder how it will fare in competition with noon and the on-going antitrust probe by regulators.
