Amazon.com Inc said on Tuesday it would offer a discount on its popular Prime subscription service for shoppers who receive U.S. government aid, taking aim at a key customer base for rival Wal-Mart Stores Inc.
Amazon said it would offer the $10.99-per-month or $99-per-year Prime service — which includes fast shipping as well as streaming of movies and TV shows — for $5.99 per month to those receiving government assistance including welfare and food stamps.
The online retailer's move directly challenges Wal-Mart — the biggest beneficiary of the Supplemental Nutrition Assistance Program (SNAP) — where at least one in five customers pay by food stamps.
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Prime subscriptions have been key to Amazon's retail growth strategy, as the service encourages shoppers to buy more goods, more often.
Customers with valid Electronic Benefits Transfer (EBT) cards receiving aid from programs including SNAP and the Temporary Assistance for Needy Families (TANF) program will qualify for the discount, Amazon said.
Amazon is also expanding its cloud business internationally and is keen to build more data centers. In March, the company signed an understanding with Chile to help modernize the country's government systems.
It has also expressed an interest in placing a data center in Patagonia, ministry technical head Sebastian Beeche told Reuters. Beeche added that President Michelle Bachelet would discuss this with company representatives during a visit to Seattle in the United States on Tuesday where Amazon has its headquarters.
In South America, Amazon has data centers only in Brazil, but is keen to expand into Chile, attracted by its relative economic and political stability and the cooler climate, said Beeche.
The company's cloud-computing business is the largest in the world and accounts for a majority of its operating profit. Adding more data centers is key so it can handle an influx of new clients looking to host their data and computing in the cloud.
Amazon did not immediately reply to requests for comment.