After months of speculation that it would do so, Amazon finally made its first foray into Southeast Asia this week by launching its Prime Now service in Singapore.
On Wednesday night, Amazon made the Prime Now app available for download in the city-state on both Apple’s App Store and Google’s Play Store. Users can take advantage of Amazon’s promised 2-hour delivery on a range of products, including electronics, groceries and consumer packaged goods.
The move came just hours before the ecommerce giant reported second-quarter results, notching a 25% increase in revenue. But, as the Singapore investment illustrates, the company continues to invest aggressively in growth with less focus on profitability. Second-quarter earnings declined 77%.
For the Singapore rollout, Amazon said it would extend Prime Now benefits to non-Prime members for a limited time. Customers who make purchases totaling at least SGD40 (roughly $29) will get their goods delivered for free.
With the move, Amazon has fulfilled a long-held expectation that it would make a move into Southeast Asia’s ecommerce sector. The expansion also pits Amazon almost directly against the world’s other global ecommerce giant, China’s Alibaba.
Amazon already finds itself lagging behind Alibaba in the region. In 2016, Alibaba bought a controlling stake in Lazada Group, the company that operates ecommerce platforms in six countries in Southeast Asia: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. (In June, Alibaba spent $1 billion to increase its stake in Lazada from 51% to 83%.)
Lazada’s properties are already dominant in most—if not all—of the markets in which it operates. According to data from SimilarWeb, Lazada Singapore outperformed any other business-to-consumer (B2C) ecommerce site in page views in April, recording nearly 4.1 million. RedMart, the online grocer acquired by Lazada in 2016, drew another 590,000 page views that month.
Still, it makes sense that Amazon would choose Singapore to establish a toehold in Southeast Asia. The country has a comparatively high internet penetration rate for the region. eMarketer estimates that 77.0% of the city-state’s population will be regular internet users this year.