The number of Prime members dropped by 590,000 in the second quarter. Is Amazon still doing well?

According to foreign media reports , a large number of users in the UK have canceled their Amazon Prime subscriptions due to the ongoing cost of living crisis .

British industry regulator Ofcom said that high inflation leading to rising living costs and Amazon's announcement in July that it would increase Prime subscription fees were two of the factors that led to a decrease in the total number of Amazon Prime members in the UK .

It is understood that in late July, Amazon announced that it would increase Prime membership fees in many European countries starting September 15. The annual price of the UK Prime subscription service will increase by 20% to 95 pounds , and the average monthly price will increase from 7.99 pounds to 8.99 pounds .

Ofcom data shows that the number of Prime consumers in the UK fell by 590,000 in the second quarter of 2022 , a year- on-year decrease of 5% .

Britons are facing a dire financial crisis as food and energy prices soar , with data showing that inflation in the UK soared to a 40-year high in July.

According to the latest data from the UK National Statistics Office , the UK Consumer Price Index (CPI) rose 10.1% year-on-year in July, higher than Reuters' forecast of 9.8% and higher than 9.4% in June.

Core inflation in the UK, which excludes energy, food, alcohol and tobacco, was 6.2% in the year to July .

To curb inflation, the Bank of England has raised interest rates six times in a row, even introducing the largest rate hike since 1995. At the same time, it predicts that the UK inflation rate will reach 13.3% in October and will fall into the longest recession since the global financial crisis in the fourth quarter of this year.

Data shows that in the second quarter of 2022, real wages in the UK fell 3% year-on-year, the largest drop on record . Although the average salary, excluding bonuses, increased by 4.7%, the increase in living costs far exceeded the increase in wages.

Since the beginning of this year, employees from more and more industries in the UK have joined strikes to protest that wage increases have not kept pace with inflation , and systems such as railways, postal services , and docks are on the verge of collapse.

It can be seen that the current financial situation of the British people is seriously unbalanced, and reducing living expenses and canceling Amazon Prime subscriptions are really helpless moves.

Although Amazon Prime subscriptions have fallen sharply, Ofcom 's survey showed that nearly three-quarters of users said they would resubscribe when cost of living pressures began to ease .

The UK is Amazon 's second largest market in Europe, but in the UK, local e-commerce companies such as Tesco and Ocado are more popular with consumers, and a strong rival, Walmart, has also announced its entry into the UK market . Amazon is attacked from both sides and it is difficult to occupy the market .

To this end, Amazon previously tried to increase its market share in the UK through services such as Amazon Fresh to consolidate its position in the UK e-commerce market, but unfortunately British consumers did not seem to buy it. Now, in order to pass on the cost pressure, it has announced an increase in Prime membership fees, which has lost more British users.

The total number of Prime members decreased in the second quarter , and coupled with the negative market in the UK and competition from competitors , Amazon's position in the UK e-commerce market may be hit .

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