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Amazon adds Singapore to its same-day delivery empire

The giant online retailer makes its Prime Now service available in the city-state, with a possible eye on other markets in the region to follow.

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Details on Amazon's Prime Now launch in Singapore have been revealed through an early release of its app in the city-state. 

Screenshot by CNET

It's now even easier to shop online in Singapore, thanks to the launch of Amazon's Prime Now service in the city-state.

The online retailer's first foray into Southeast Asia begins with one of the most advanced cities in the world, and the company plans to entice customers by dangling free two-hour shipping for orders above S$40 ($29).

While Amazon's debut has long been anticipated -- rumors were swirling as of last year -- the Singapore move comes with empty stores in malls on the rise, and the highly competitive online retail space has seen big players such as China's Alibaba swoop in to buy out struggling local online supermarket retailer Redmart through e-commerce site Lazada, which it owns a 90 percent stake.

Even so, Amazon doesn't appear deterred.

"We're going to be offering tens of thousands of products to be delivered to your doorstep for free in two hours," Henry Low, Amazon's director of Prime Now, Asia Pacific, told CNET. "You'll be able to get groceries, chilled beer, milk, baby products and consumer electronics."

Low said Singapore's tech-savvy people will be drawn to the service.

"This is the first time we're offering Prime Now to an entire country. Singapore allows us to launch to the whole country at the same time, but when you look at the Singapore consumer, at Singapore -- it being urban, a great metropolitan city, people are very tech-savvy, it makes a great match with the Prime Now value proposition."

Low pointed out that its local competition usually had deliveries that took longer than Amazon's Prime Now's two-hour service, and that the speed would allow customers to fulfill their shopping needs possibly even faster than going to an actual mall.

To make that happen, Amazon is relying on its largest global Prime Now facility, internal routing algorithms and a fleet of local delivery drivers to make sure its packages get to customers on time. For customers who require even more urgent deliveries, Amazon is also promising one-hour deliveries for a flat S$9.99 ($7.35) fee, and orders under S$40 ($29) will cost S$5.99 ($4.40). Shipping hours will be from 10 a.m. to 10 p.m. daily.

Amazon's Prime Now facility in Singapore is its largest globally.

Aloysius Low/CNET

Unlike in the UK or the US, Prime Now doesn't currently require an Amazon Prime membership.

"Convenience commerce is the right move for urban populations like Singapore's," said Lawrence Cheok, IDC senior research manager, citing examples like Tesco Homeplus in Korea and Chinese online grocer Yihaodian on how it would work.

"With a timed-window, same-day delivery, it's also a good experiment to test out Amazon's operations in the region," he added.

Cheok thinks that Singapore is not a profitable market for the company -- it makes for a good launch pad and testbed, but doesn't have the scale Amazon needs for making a good return. What Amazon could do, though, is use Singapore as a hub for general merchandise while also experimenting with how to expand throughout Southeast Asia, a market that's the next big thing after China and India.

But success will be tricky, according to Cheok, as rival Alibaba already has an advantage by buying local online retailer Lazada.

"More importantly, localization and country adaptation is one important success factor to win in Southeast Asia. Amazon has the history and mentality of 'doing it my way,' while Alibaba has a better track record of understanding cultural differences and leveraging partnerships to close these gaps," he said.

There's no word yet on whether Amazon will be bringing in its Amazon Prime subscription service as well as its other Amazon products such as the Echo and Echo Dot to Singapore, with Low saying only that more information will be revealed in the future. For now, shoppers from Singapore are still able to shop at Amazon's international site and enjoy free shipping for orders above $125 (roughly £90 or AU$155).

Low added that he was "excited about possibilities in the region," but remained tight-lipped about the company's plans. 

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