The Zhitong Finance App learned that Walmart (WMT.US) launched a joint membership package with WalMart+ and Sam's ClubPlus this week, directly targeting Amazon (AMZN.US) Prime members and market openers (COST.US).
According to reports, the annual fee for this joint membership is 120 US dollars, which can save 100 US dollars compared to buying it separately for a year. This price is $19 cheaper than Amazon Prime's $139 annual fee. It's also lower than the $130 Premium membership with Market Opener, but $55 more expensive than the regular Gold Star membership of $65 with Market Opener. For consumers who subscribe to both Prime and MarketMaker Premium membership, switching to this bundled package can save up to $149 per year, which is the most powerful discount.
“This is a huge blow to Prime,” Brett Ross, CEO of the National Consumer Suppliers Association, said in an interview. He pointed out that with an annual fee of $120, you can also enjoy warehouse membership benefits, delivery services, streaming content, and gas discounts. Ross said that in terms of cost performance alone, Walmart has easily won in terms of paper data.
“The timing itself says it all. “As the holiday season approaches, consumer budgets are tight; the membership system can lock in user loyalty and stabilize continuous revenue before everyone finalizes the spending plan,” Ross said. “Membership plans are a gripper for retaining users, but low prices are fundamental.”
On Wall Street, Oppenheimer analyst Rupesh Parik and his team believe that the biggest winners of this new plan are consumers: the membership benefits package is richer, Walmart and Sam products can be delivered directly to their homes without additional price increases, and the additional costs required for upgrades are very low.
Parick commented: “This new product further strengthens the value advantage of the Walmart membership system over Amazon Prime and market openers. If the membership program starts successfully, Walmart is expected to seize more users' wallet shares, especially the delivery business; however, in the short term, profit margins are likely to be under pressure.”
Looking ahead to the future market, Walmart launched this package just before the holiday season, which may force Amazon and market openers to step up promotions and further increase competitive pressure.