Business / Corporate

Amazon Japan raises cost of Prime membership for first time in 11 years, by 26% to ¥4,900

Bloomberg, JIJI

U.S. e-commerce giant Amazon.com Inc. has raised the price of its Prime membership service in Japan for the first time since launching the service 11 years ago, citing rising costs.

The annual price for shipping, video-streaming and an array of other services rose by 26 percent to ¥4,900 ($44) starting from Friday, the Seattle-based company said in a statement the same day. Fees for monthly users were raised by ¥100 to ¥500 per month.

Prime membership prices differ by country, and the cost in Japan still pales in comparison to the United States, where the annual fee is $119.

Amazon has built Japan into one of its biggest overseas markets even as the government estimates e-commerce penetration at less than 6 percent and a graying population remains wary of shopping online. In the past five years, the company has bolstered its offerings in the nation, rolling out services such as music, video, Amazon Fresh and Prime Wardrobe.

Amazon follows a slew of other companies in Japan that have raised prices on goods such as ice cream, cup ramen and bottled drinks, all citing increased costs for logistics and personnel as the labor market remains tight. Parcel carrier giant Yamato Holdings Co. said in 2017 it would negotiate higher prices with business customers, including Amazon, as the increase in demand for its delivery services took a toll on its workers.

Meanwhile, the Fair Trade Commission said Thursday it had terminated an antitrust investigation into Amazon Japan G.K.’s planned reward point program.

The move followed a decision by the unit of Amazon.com Inc. to withdraw a plan that would have obliged all sellers using its online shopping platform to provide reward points. The FTC judged that Amazon Japan’s decision resolved concerns over potential abuse of its dominant bargaining position.

The probe began after Amazon Japan said in February it would offer customers reward points worth at least 1 percent of purchase amounts for all items from late May.

Under the program, sellers using the company’s platform would have shouldered the costs for the reward points.

On Wednesday, Amazon Japan said it will allow each seller to decide a reward point policy on its own.