Seattle-based global e-commerce and cloud computing behemoth Amazon.com Inc. (AMZN) continues its global expansion as it doubles down on America's northern neighbor. The tech giant plans to roll out its one- and two-hour membership delivery service in Canada by the end of 2017, reports The Wall Street Journal. The move marks Amazon’s greater push into the country, according to people familiar to the matter. (See also: Best Buy Has ‘No Reason to Exist’ in Amazon Age: Wedbush.)
The pilot program is expected to begin in Vancouver and Toronto by November and January, respectively, and will involve the delivery of groceries and other products to consumers within a short two-hour period. Depending on the success of the pilot program, Amazon may choose to expand the program across other Canadian cities.
Global Grocers Face Increased Competition
The news comes as the market reacts to Amazon’s close of its $13.7 billion Whole Foods Market Inc. (WFM) acquisition, beating down the stocks of rival grocery retailers such as the Kroger Co. (KR) and Sprouts Farmers Market Inc. (SFM). Retailers across Canada aren’t safe from Amazon fears either, as the company now owns 13 Whole Foods locations in the country, primarily in the Toronto and Vancouver areas.
Amazon Prime Now in Canada will focus heavily around its grocery items, reports the WSJ, which viewed documents including a presentation to Prime suppliers. Canadians will have access to thousands of grocery items, selecting from a wide range of categories such as frozen food, personal care items, dairy, health and produce. As part of the rollout, Prime Now will partner up with local Canadian bakeries, butchers and other grocers.
Amazon Prime Now’s entrance reflects an initiative to tap into its growing e-commerce market, expecting to expand to 5.3% of total spending by 2020 to reach C$6 billion ($4.8 billion) in sales, up from just 1.9% of spending now. The membership will cost $63 annually and will include free two-hour delivery and a one-hour delivery with a service charge. So far, Amazon has introduced the service in nine countries including Singapore, the U.K. and Japan. (See also: Amazon Deal Won’t Fix Nike's Deeper Issues: NPD.)