The e-commerce company said that “Amazon Prime” would start operating in the grand duchy on 8 November. That made Luxembourg the 15th country where its membership programme is offered.
The key feature of Amazon Prime is “unlimited free one-day delivery on hundreds of thousands of products”, according to a company press release.
One-day delivery was already available in Luxembourg, for an average €5-€10 fee, but signing up for a one-month membership is simply cheaper. Amazon Prime costs €3.99 a month or €49 per year in the grand duchy. “Customers in Luxembourg can try Prime by signing up for a free 30 day trial,” the company stated.
Membership also includes Amazon Prime Video, its Netflix-style streaming movie and TV service. It features original series such as “The Grand Tour” and “Transparent”, as well as an on-demand library.
Among other features, members receive special shopping deals, access to the Twitch Prime video-gaming community, and unlimited photo storage and 5GB of free file storage in Amazon’s cloud.
European network
Customers in Luxembourg will need to shop on the company’s German site, Amazon.de, which is available in English. That’s not to say the firm isn’t present in this country.
The company employs more than 1,500 in the grand duchy, its European hub, and on Tuesday had nearly 170 open full-time positions advertised here. Those are corporate jobs; its logistics centres are located elsewhere in the EU.
The Amazon fulfillment centre in Fife, Scotland, 14 November 2011. Photo: Scottish Government
Luxembourg shoppers are, for example, likely to be served by the firm’s nearest fulfillment centres in Koblenz, Germany, near Paris, or in Lille, France. Amazon also runs its own internal freight service between warehouses to manage supplies across EU markets, the company has indicated.
A bulk of Prime customer deliveries will be made by the shipping firm DHL. Items can be sent to a home or office address, package pickup point or an automated parcel locker.
Moving past tax case
The announcement came a month after the European Commission told the firm to pay around $250m in back taxes to Luxembourg, saying national authorities improperly favoured Amazon’s EU operations.
Amazon stated at the time:
“We believe that Amazon did not receive any special treatment from Luxembourg and that we paid tax in full accordance with both Luxembourg and international tax law.”
Nevertheless, it will pay the disputed amount into an escrow account while it considers an appeal.
Global strategy
The company has pegged a big part of its strategy on Prime. The countries where Amazon operates the service have seen faster growth, it has claimed.
Amazon Prime had already been available in the US, UK, Japan, Germany, Italy, Spain, France, Canada, Austria, the French-speaking part of Belgium, India, China and Mexico. In addition to Luxembourg, the company rolled out the service on Wednesday to the Dutch-speaking part of Belgium and the Netherlands.
An Amazon German shipping box. Photo: Olli Henze (CC BY-ND 2.0)
The company has only said that “tens of millions of members around the world” use Prime, but has not broken out specific figures.
Take-up of the service is largely concentrated in America. Morgan Stanley, an investment bank, estimated that “70% of all Prime subscribers live in the US”, Business Insider reported in April.
According to a report by Consumer Intelligence Research Partners, an investment research firm, issued on 18 October (PDF), “in the US, Amazon Prime has 90 million members.” CIRP found that members were more valuable to the firm, writing:
“These shoppers continue to spend on average about $1,300 per year, compared to about $700 per year for non-member customers.”
Amazon would not provide a forecast of how many members it aims to attract in Luxembourg.
Correction: A previous version of this article misstated the amount of free data storage. This was updated on 8 November at 4:30pm.