Amazon’s strong growth in its US home market hasn’t stopped it from aggressively expanding abroad. In today’s Insight Flash, we take advantage of our newly launched European data to examine trends across three geographies, looking at overall share as well as how the company’s Prime service has been received abroad.
Across our three tracked geographies of the US, UK, and EU, the share of transactions has remained relatively consistent over the past three years. The US has made up about two-thirds of Amazon transactions during this period, with a quarter coming from the UK and the balance from the EU. Share for the UK and EU tends to be slightly higher in November, perhaps due to earlier holiday shopping, while US share shows an uptick in December. The UK saw a small rise in share in the winter of 2021, when new pandemic lockdowns may have boosted online shopping.
Transactions Share by Geography
In addition to breaking out geographic performance, however, CE Transact Global also has the advantage of offering a consolidated global view. For instance, it allows an aggregated view of how many subscription transactions there are for Amazon’s popular Prime program. Prime allows free shipping among other perks such as access to its media services and discounts at its Whole Foods grocery. From a global perspective, transactions of Prime subscriptions are sagging. They reached a peak in January 2022, and have been declining since. Although there does tend to be seasonality in Prime signups and follow-on annual payments focused around holiday shopping, year-over-year transactions have been increasingly negative since July, with -10% fewer transactions in December 2022 than in December 2021.
Global Prime Transactions
Interestingly, these declines are coming largely from the UK and EU, while the more mature US market is showing much stronger trends. In the US, Prime transaction growth has decelerated about 5% every quarter this year, ending in flat y/y growth in 4Q22. In the UK, y/y growth was positive in Q1 but decelerated to -15% by Q4. The EU showed mildly negative y/y growth in Q1, but decelerated to -25% growth by Q4. This slowing in Prime transactions may be indicative of diminishing loyalty to Amazon, and it will be important to track how spend trends correspond over the months ahead.