Amazon share price up, boosts Prime numbers

Amazon.com Inc announced on Friday that it had expanded its Prime customer base with more than 10 million new members during the holidays.

Prime members, who pay $99 a year in order to get unlimited free two-day shipping, are projected to spent twice as much as regular members and Amazon considers them vital to its growth in the future.

However, the internet retailer did not specify exactly how much Prime members it has, but said it was the most popular delivery option. Also Amazon did not say how many of those 10 million new subscribers actually paid for the service rather than just use the 30-day free trial it offers.

Earlier this month Amazon introduced Prime Now in Manhattan, the improved service offers free two-hour delivery on some goods. The company can offer such fast execution times as it utilizes its new warehouse located near the Empire State building.

“We are working hard to make Prime even better and expanding the recently launched Prime Now to additional cities in 2015,” CEO Jeff Bezos said in a statement.

Amazon said it had 10 times more one-day delivery orders compared to a year earlier. The company also said almost 60% of it customers purchased items using a mobile device during the holidays and added that sales made through its smartphone application doubled this year.

“Mobile continues to accelerate the secular shift from offline to online purchases,” said R.W. Baird, an analyst Colin Sebastian, cite by Reuters. “Consumer use-cases for last-minute shopping, in-store purchases and price comparison continue to expand.”

The success of the Prime services, with more than tens of millions of subscribers, puts a lot of pressure on e-commerce rivals, with only a few of them who can keep up with Amazons cheap and fast delivery system. The internet giant has sacrificed profit or even turned negative on orders under its expansion efforts.

“Amazon is essentially setting a standard, and everyone needs to match that,” said Sucharita Mulpuru, an ecommerce analyst with research firm Forrester, cited by the Financial Times.

Amazon.com Inc gained 2% on Friday and closed at $309.09 on the NASDAQ, marking a one-year decrease of 23.57%. The company is valued at $143.11 billion. According to the Financial Times, the 37 analysts offering 12-month price targets for Amazon.com, Inc. have a median target of $350.00, with a high estimate of $450.00 and a low estimate of $296.00. The median estimate represents a 13.24% increase from the last price of $309.09.