Amazon is looking to expand its two-hour Prime Now delivery service in Europe by establishing 1,300 new warehouses on the continent, The Telegraph reports.
The company is seeking small warehouses situated close to urban population centers where it can stock popular products and deliver them quickly to Prime members.
Amazon is focused on expanding its sales outside the US, and already has a foothold in Germany and the UK, which are the company’s second and fourth largest markets, respectively. However, Amazon’s Prime subscription service has not seen widespread adoption in Europe like it has in the US, even though Prime is already available in the UK, France, Germany, and Italy. In fact, Morgan Stanley estimates that 70% of all Prime subscribers live in the US. Prime is a key weapon for Amazon — 40% of Prime subscribers spend more than $1,000 annually on Amazon, compared with only 8% of non-Prime subscribers, according to Morgan Stanley.
Increasing Prime subscribers in Europe is key to growing Amazon’s sales there, and expanding Prime Now delivery is one way to lure more European consumers to sign up for the service. Amazon’s retail business is heavily reliant on its home market in the US, which makes up two-thirds of its sales. Although Amazon has a 40% share of online sales in Germany, and a 27% share in the UK, it needs to make more headway in other European countries to take a larger stake of Europe’s e-commerce market, which is worth more than $545 billion.
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