United Kingdom is the sixth largest economy in the world and one of the most important markets for Amazon. Amazon Prime subscription has now penetrated nearly 33% of households in the country and, according to Cowen and Company, Amazon has plenty of room to increase its Prime membership base in the UK.
Cowen and Company expects Amazon UK to follow in the footsteps of the United States, and increase Amazon Prime penetration. Amazon’s current penetration level of 33% in the UK is what the company had in the United States in 2015, and now that number has grown to 47% in United States by the end of first quarter of 2017.
According to Ons.gov.uk, there were 27.1 million households in the United Kingdom. With nearly 8-9 million members on Amazon Prime, the e-commerce giant may have already reached a position of strength in the country.
Source: Amazon 2015 Annual Report
Amazon does not break out revenue numbers by country but, in 2015, Amazon made $9.03 billion from the UK according to reports – nearly 25% of their $35.418 billion in International sales during the year. TheNorth America retail segment had sales of $63.708 billion that year.
Amazon’s UK revenue may have already gone well past ten billion dollars, and with Amazon Prime membership numbers expected to follow US growth, that number will keep ticking up slowly over the years. And, if Amazon Prime benefits in the UK keep piling up the way they did in the United States, penetration may well exceed that of the United States over the next few years.
And let’s not forget the fact that Amazon doesn’t even feature in the list of grocery giants in the UK, currently headlined by Tesco, then Sainsbury’s and Asda. The company will surely be looking to leverage the UK’s relatively small physical size (compared to the United States) to create a physical footprint that can address that specific market.
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Source: Emarketer
