SINGAPORE - American e-commerce giant Amazon has made its first foray into South-east Asia with the much-anticipated launch of its fast delivery service Prime Now in Singapore on Thursday (July 27).
The two-hour delivery service, available through the Prime Now mobile app, gives shoppers here access to tens of thousands of products ranging from groceries to electronics and sporting goods stocked at its new fulfilment centre in the Jurong industrial area.
Amazon's entry into the region sets the stage for a clash with Chinese tech giant Alibaba, which controls Lazada, South-east Asia's largest e-commerce site.
As rumours swirled about Amazon's impending launch in Singapore over the last several months, Lazada Singapore made several moves to strengthen its foothold, including the launch of a membership programme called LiveUp, which offers users benefits such as rebates and discounts for RedMart, Netflix, Uber, UberEats and Taobao Collection.
It also moved its warehouse operations to the SingPost Regional eCommerce Logistics Hub in Tampines in May in a bid to streamline its e-commerce and logistics efforts and hasten turnaround times.
Amazon Prime Now's delivery of groceries including chilled beer and fresh produce will also pit it against online grocer RedMart, which was acquired by Lazada in November last year (2016).
Minister for Trade and Industry (Industry) S. Iswaran said at the launch that while digital technologies are disrupting value chains across industries, the digital economy has potential to bring about enormous opportunities, particularly in Asia, with its emerging middle class and rapid urbanisation.
Amazon, which uses new technologies such as artificial intelligence, can serve as a valuable partner for retailers, local brands and individual merchants as they embark on their own digitalisation strategies, he said.
"By tapping on the Amazon Prime Now platform and its global fulfilment networks, they can access and serve global markets at scale and speed."
Local brands such as Tiger Balm and Mamypoko are working with Amazon to make their businesses e-commerce ready, such as by improving their supply chain management and digital inventory, Mr Iswaran said.
Amazon Prime Now is a quick delivery service for members of a programme known as Amazon Prime. It is currently available in about 50 cities around the world.
The Amazon Prime membership programme will be launched in Singapore "soon", Mr Henry Low, director of Prime Now for Asia Pacific, told The Straits Times in an interview on Wednesday (July 26). But the Prime Now service will be available here without the membership requirement in the meantime, offering free two-hour delivery with a minimum order of $40 and one-hour delivery for a fee of $9.99.
Items, sourced from hundreds of local vendors and distributors as well as imported from overseas, can be delivered between 10am and 10pm. A check on the app shows products such as Maggi instant noodles, Milo and Tiger Balm available for purchase. There were also products from Amazon's in-house line. Amazon's Prime Now Fulfilment Centre in Singapore is now its largest in the world, occupying about 100,000 sq ft at the Mapletree Logistics Hub in Toh Guan Road East.
"This is the first time we're launching Prime Now and making it available to the whole country at the same time," said Mr Low, 42.
Singapore is a good country to launch the service as it is a dense urban city with high demand for convenience, he said. The company currently employs "hundreds" at its fulfilment centre and in multiple corporate offices in the downtown area.
As Amazon does not yet have a local website, items ordered off its international stores currently take days to deliver.
"We started with a mobile application because we found that was what matched the Singapore consumers' habits, and it allows them to be able to get ultra-fast updates and notifications on their phones," said Mr Low.
To make the fast deliveries, employees in the warehouse locate and pick up items within minutes of an order, which are then sorted into batches to ensure the most efficient delivery route.
While he declined to reveal Amazon's local delivery partners, Mr Low said that a team of them are equipped with an app that helps with deliveries.
Asked about the launch of other services and products currently unavailable here such as Amazon's Kindle e-reader, Mr Low said he was unable to comment.
"Let's just say there are a lot of different experiments and innovations that we are trialling and testing. For us, this is day one in launching a physical offering to Singapore, and there will be more things to come," he said.
He was similarly mum about expansion plans in the region, saying: "Singapore is where we're starting... I'm optimistic and excited about South-east Asia's growth."