Amazon.com (NASDAQ:AMZN) announced on Tuesday that it has discounted the price of the Amazon Prime program membership by around 45% for federal welfare low-income shoppers.
Amazon Vs. Wal-Mart
The announcement comes after a number of traditional retailers have plunged causing Amazon and its main competitor Wal-Mart (NYSE:WMT) head to head with each other as America’s top retail store as the revenue of the two companies amounted to as much as $600 billion combined back in 2016.
More than fifty percent of American families or households reportedly subscribe to Amazon Prime while almost 90% of Americans are within arms reach of the Walmart stores with the latter cashing in the biggest revenue than any other company in the world.
Despite this, Walmart has only grown by around 2% in the last five years while Amazon has grown twice as much since the year 2012 making it one of the top five most valued companies in the United States based on market value next to Microsoft and Facebook (NASDAQ:FB).
This will allow customers who receive government assistance to access Amazon Prime membership for only $5.99 per month compared to the regular cost of $10.99 per month or $99 a year. Amazon Prime membership benefits include free shipping and free content streaming.
Electronic Benefits Transfer card users, which is used for people under the Supplemental Nutrition Assistance Programs or food stamps, will now be eligible for a $5.99 monthly Amazon Prime fee. According to Amazon, the program was started to make the benefits of the program more selection and savings friendly.
Investors saw the announcement as part of the company’s move to expand into the whole retail sector and by making sure that customers choose Amazon over its top rival Walmart who has been offering competitive prices, deliveries, and overall operations in the past quarters. The two companies are also in a price battle with their own packaged goods that are threatening well-known American household brands.
Amazon $1K Market Cap
Last Friday, Amazon shares crossed the $1,000 level for the first time making it one of the few companies on Wall Street trading at the level. Amazon’s market cap then closed in to $500 billion at $486 billion. Amazon shares are currently up by 35% this year.
Amazon is now the fourth largest company based on market value behind Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG). Amazon’s market value is also now twice to that of Walmart valued at $240 billion. Amazon has also been given a twelve-month price target of $1300 with the online retail giant projected to be worth at $1 trillion in a couple of years at a rate of 21% annually by 2019.