Amazon Prime makes first foray into South East Asia

Image source, Amazon

Amazon has taken its first foray into South East Asia, launching its Prime Now service in Singapore.

The move is seen as the start of an aggressive expansion in the region, which has a population of about 600 million people.

It is also the first time Amazon has gone head-to-head with Chinese rival Alibaba in Asia.

The Singapore service promises two-hour delivery on thousands of items including groceries and electronics.

Its biggest rival will be Redmart, owned by Lazada, which is in turn controlled by Alibaba.

No Echo

Amazon Prime is a service available to Amazon customers who pay an annual membership fee.

It was first launched in New York in December 2014 and has since expanded to more than 50 major cities in nine countries.

Initially Singapore customers will not have pay for a subscription - but while they can order electronics, toys and sports gear as well as food and drink, the Prime Now service will not initially include other Amazon Prime services including video streaming or Amazon Echo.

Books also seem unavailable to order on the app.

Image source, Amazon

Asian invasion?

Amazon already has a significant presence in India and Japan but analysts say that South East Asia represents one of the biggest battlegrounds for e-commerce firms.

However, it is a highly fragmented market, comprising many different cultures, languages and regulations.

Singapore is seen as a good testing ground for regional expansion because of the developed infrastructure and relatively wealthy population.

As well as owning Redmart, Lazada also has a presence in several other Southeast Asian countries.

Customers will be the winners - Analysis by Karishma Vaswani, Asia Business Correspondent

Singapore is seen as a launching pad for many e-commerce giants trying to take on the wider Southeast Asian region - a potential market of 600 million people that could, by some estimates, be worth $70bn.

But Singapore isn't South East Asia, and logistics and infrastructure issues in countries like Indonesia and Thailand have yet to be conquered.

While Amazon may be able to deliver on its two-hour delivery promise in small and efficient Singapore, it's hard to see how it's going to do that elsewhere.

Plus Alibaba has the first-mover advantage, and local knowledge which in Asia goes a long way.

So let the fresh food fight begin. Chances are the customers will benefit most, as price wars will be the name of the game.

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