After years of preparation, Amazon has finally launched its same-day Prime Now delivery service in Singapore.
The service brings two-hour, and even one-hour deliveries, for tens of thousands of household items, from eggs and cold beer to diapers and detergent.
To achieve the rapid delivery times, Amazon’s opened its largest Prime Now warehouse to date, at 100,000 square feet of space near the Jurong district.
This is Amazon’s largest Prime Now warehouse, at 100,000 square feet.
The hotly anticipated launch lit up social media this week, as chatter grew about the service coming to rival local incumbents, as well as China’s Alibaba, which recently bought a presence here by scooping up Southeast Asia’s Lazada.
Eventually, the cat was out of the bag after people spotted the Prime Now app becoming available on Wednesday.
On Thursday morning, staff shuffled between shelves bagging and packing sundries, ready to send them out.
Outside the warehouse, vans from local third party logistics provider Ninja Van waited to help make sure the big day went well.
Amazon’s Singapore country leader for Prime Now, Sebastien Bruchet, told Mashable that Amazon plans to rely on third party delivery services, across vans and cars, for the moment here. If the service really takes off, it may consider investing in building out its own delivery system, similar to what it’s done in the U.S., he said.
But unlike its U.S. warehouses, which deploy robots to shuffle shelves around and locate goods, the Singapore warehouse relies on humans, who do everything from placing goods on a shelf, to picking them out and sending your parcel on its way.
Amazon has a reported 45,000 robots in 20 of its warehouses globally, which look like large Roombas and help to carry shelves of goods around so human sorters can find what they need faster.
Years of false starts
This launch is a triumph for Amazon, which has for years mulled entering Southeast Asia.
It encountered several delays in recent years, while aggressive competitors overtook it here. Alibaba decided to come in in April last year, by way of a $1 billion investment into Rocket Internet’s Lazada, which dominates Southeast Asia.
It must have seen more potential, because it put in another $1 billion in June, raising its stake in the Singapore-headquartered firm to 83 percent.
Xiaofeng Wang, senior analyst at Forrester, said Singapore’s westernised and affluent consumer base made Singapore an obvious launching pad for Amazon’s ambitions in the region.
Still, Alibaba’s first mover advantage means it has better understanding of the demands and buying behaviour of local customers, as well as its existing relationships with logistics vendors, she said.
Singapore’s mobile-savvy population of 5.5 million presents a pretty decent opportunity for Amazon. But there’s far more that lies ahead in the 600 million in its neighbouring countries.
The growing middle class is estimated to reach 400 million in 2020, up from 190 million in 2012, according to Nielsen figures. That, combined with rapid adoption of smartphones and digital spending, means e-commerce is set to skyrocket.
A research paper by Google and Temasek Holdings estimates online spending in the region will grow to $88 billion in 2025 — more than 10 times the $5.5 billion spent in 2015.
Satish Meena, senior forecast analyst at Forrester, noted that Amazon was able to capture significant market share in India in just three years.
“We expect that this will be the start of a direct face-off between Amazon and Alibaba in Asia.”