NEW DELHI
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E-commerce big Amazon is unbundling its Prime membership, which bundles video streaming, music, free supply, and unique offers, into distinct tiers tailor-made to completely different buyer segments throughout India.
Amazon has revamped its Prime membership programme in India “to cater to numerous earnings ranges”, Abhinav Agarwal, director and head of Amazon Prime India, advised Mint in an interview.
“Amazon Prime centered on customizing advantages resembling Prime Video and adjusted membership charges accordingly for Prime in India,” he added.
The India-specific unbundling method for a service lengthy outlined by its all-in-one pitch displays evolving market dynamics, the place a metro subscriber primarily considering streaming content material has vastly completely different wants and willingness to pay in comparison with a tier-II metropolis buyer centered on quick supply.
How unbundling works
Amazon’s unbundling technique segments prospects by behaviour quite than value.
The ₹399 Buying Version presents delivery-only advantages, concentrating on transactional patrons in smaller cities. Prime Lite at ₹799 provides restricted video entry for price-conscious customers, whereas the usual ₹1,499 Prime membership contains full advantages however now comes with adverts on Prime Video.
Prospects who need the unique ad-free expertise should pay an extra ₹699, elevating the full by 47% to ₹2,198.
Amazon India’s promoting income grew 25% to ₹8,342 crore in 2024-25, outpacing the 21% development in its market enterprise and making it one of many firm’s fastest-growing segments, knowledge from enterprise intelligence platform Tofler confirmed.
The tiered method displays Amazon’s shifting priorities. Prime Video subscriber development has plateaued at round 21 million in comparison with JioHotstar’s 300 million. 4 out of 5 Prime members use video repeatedly, whereas one in three engages with music, in keeping with knowledge Amazon shared with Mint.
The corporate would not disclose what number of actively use purchasing advantages versus those that primarily subscribe for content material. Nonetheless, it’s betting on supply infrastructure quite than content material in tier-II and -III cities.
It invested ₹2,000 crore in India 2025 to increase its fulfilment community, making same-day and next-day deliveries out there in 850+ extra cities. Agarwal famous that same-day orders in metros grew 65% year-on-year, whereas tier-II and -III cities noticed 50% development in next-day deliveries, suggesting the infrastructure-focused, lower-priced tiers are discovering traction past the nation’s largest markets.
Strategic pivot
The bundling mannequin was constructed on cross-subsidisation: Video content material would entice subscribers, whereas purchasing exercise would generate income. However that equation seems to be shifting, in keeping with analysts.
Primarily as a result of “Amazon’s video-first subscribers by no means advanced into the high-frequency buyers the corporate initially anticipated,” stated Sohom Banerjee, senior analysis affiliate at CUTS Worldwide, a coverage analysis and advocacy group.
Whereas Amazon has positioned its tiered Prime construction as an enlargement of client selection, “the technique concurrently seems designed to nudge pure video customers in direction of both greater spending or exit, a deliberate devaluation of the default video providing, pressuring heavy streamers to both tolerate adverts, downgrade to constrained entry, or churn altogether,” he added.
“This type of ‘subsidy’ is to drag individuals in to make use of their product, after which as soon as they’ve a mass of customers, it’s after they begin making an attempt to see how a lot they will squeeze,” stated Isha Suri, an impartial researcher and international AI and market energy fellow at civil society group The European AI Society Fund.
“The issue with built-in enterprise fashions is that they will use completely different levers to abuse that dominant place and see how a lot it might probably squeeze out from its loyal prospects.”
Amazon now appears to be “prioritizing Arpu (common income per consumer) and commerce worth over protecting customers who barely store and likewise refuse adverts in the event that they don’t subsidise both method”, stated Abhivardhan, president of trade discussion board Indian Society of Synthetic Intelligence and Regulation.
The strategic pivot is clearest in small cities, the place Amazon is betting on supply infrastructure over content material with the ₹399 shopping-only tier. “They intend to penetrate and convert extra tier-II and tier-III district-based customers into long-term purchasing customers by the Prime Lite and Prime plans,” he added.