Back to top

Image: Bigstock

Amazon Announces Launch of Prime Membership in Mexico

Read MoreHide Full Article

Amazon.com, Inc. (AMZN - Free Report) announced the launch of Prime membership in Mexico yesterday. The move comes nearly two years after Amazon started operating in the country through Amazon.com.mx.

Mexico is the first country in Latin America to receive Prime with the largest selection on the launch date. The program will cost Mexican shoppers $23 for the first year, which will be doubled to $46 in the second year. Notably, the price is far less than what it charges in the U.S. and other international markets. 

However, Prime in Mexico doesn’t come with all the perks offered in the U.S.  Instead, the major focus areas are fast and free shipping and Amazon Prime Video. Mexico is the first country in which Amazon is offering both these services together at launch. It had previously launched Prime in new countries only with free shipping facility.

Notably, Prime has been a great success for Amazon in the U.S. The company is now looking forward to replicate this success in international markets. The current focus is on building video content, primarily for Prime subscribers, owing to considerable growth prospects.

We note that Amazon shares appreciated 51.2% in the last one year compared with the Zacks Internet Commerce industry’s gain of 40.8%. International expansion will continue to back the momentum going ahead.

Amazon Prime Lands in Mexico

Amazon is offering free same day delivery in Mexico City metro area and free 1-day shipping in places around Mexico City like Guadalajara, Puebla and Querétaro. Items can also be ordered from the U.S. via Amazon EE.UU.

The company has announced that Amazon Prime video service will offer a large number of popular movies and TV shows including its original series “Mozart in the Jungle, “Transparent,” “Goliath,” “The Grand Tour , “Man in the High Castle,” “Sneaky Pete,”  and “Bosch”.  “Patriot,” “American Gods,” and “The Tick” will be available later this year. The service will put Amazon in direct competition with Netflix (NFLX - Free Report) in the region.

International Expansions Key Catalyst

In December last year, the company launched Prime Video (leaving out China) globally. That makes sense especially when it is seeing intense competition in online retail and Prime saturation in the U.S.

Amazon.com, Inc. Revenue (TTM)

However, its retail business in the U.S. is still hard to beat on price, choice, convenience; you name it, thanks to Prime and Fulfillment by Amazon (FBA).

If Amazon is able to witness the same level of success internationally, the company could see far more growth. At the moment, international contributes a one-third of total revenue but generates just a fraction of profits.

Zacks Rank & Stocks to Consider

Currently, Amazon has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Applied Materials, Inc. (AMAT - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For the current year, while estimates for Applied Materials went up 8.7%, the same for Advanced Energy remained unchanged in the past 30 days.

8 Stocks with Huge Profit Potential

Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>

Published in