Amazon announces increase in Prime membership fees in many European countries

On July 25, US e-commerce giant Amazon announced that it would increase Prime membership fees in several European countries by as much as 43%, mainly to shift the pressure of rising costs.

The decision comes as new Amazon CEO Andy Jassy faces intense pressure to shore up Amazon's profits amid rising inflation and a looming recession .

It is understood that the annual fee for Prime members in the UK market will increase by 20%, from 79 pounds to 95 pounds. The annual fee for Prime members in the French market will increase the most, by 43%, from 49 euros to 69.9 euros. The annual fee for Prime members in the German market will increase by 30%, from 69 euros to 89.9 euros. The annual fee for Prime members in the Spanish and Italian markets will both increase by 39%, from 36 euros to 49.9 euros.

The changes will take effect on September 15 when new members join or existing members renew.

It should be noted that in addition to the annual subscription fee, the monthly subscription fee will also increase. In the European market, the monthly subscription fee will increase by 1 pound or 1 euro.

Amazon explained in a statement that this is the first price increase for Prime membership in the European market since 2018, and the price increase is to cope with the increase in operating costs caused by inflation. Amazon will continue to work hard to provide better services for Prime members.

Earlier this year , Amazon raised the annual fee for Prime in the United States from $119 to $139.

In April, Amazon released its first quarterly financial report, and the company faced its first quarterly loss in seven years, with a net loss of $3.8 billion. The main reasons for the loss were rising employee wages, rising gasoline costs, and the return on its investment in electric vehicle company Rivian Automotive Inc. failing to meet expectations. In the just-concluded second quarter, the value of the investment fell by another $4 billion.

Amazon's online market revenue experienced explosive growth at the beginning of the epidemic, but in the face of the current slowdown in the e-commerce market, it has to implement a cost-cutting plan. Amazon recently suspended plans to build a new office building in Bellevue, east of Seattle, and began renting out warehouse space in New York, New Jersey and California.

Amazon has previously said it would try to avoid passing on costs from inflation, the Covid-19 pandemic and other macroeconomic challenges to consumers. But faced with rising costs, in May Amazon began charging sellers who store and ship products in major European markets a 4.3% fuel and inflation surcharge, following similar measures in the United States.

It is not clear how much of the operating costs will be offset by the Prime price increase, but the number of Prime members in the United States has stagnated for the first time in the first half of this year. To a certain extent, the membership fee increase at the beginning of the year has increased the burden on American users . It is not known what kind of situation Amazon's European market will face in terms of membership growth after the membership fee increase.

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