Can The Warehouse emulate Amazon with its e-commerce platform TheMarket?

Online marketplace TheMarket has launched a subscription service. Photo / Supplied

Local retail chain The Warehouse has launched a subscription service for its e-commerce platform TheMarket with a model that echoes global giant Amazon by offering free shipping, streaming and video content services.

The question is, can the company attract the critical mass of consumers needed to make it work?

The subscription service, called TheMarket Club, offers shoppers who sign up to the service free delivery for orders over $45, "VIP customer service" and other perks such as free trials to Sky Sports Now and Neon, and others offers such as a $35 kickstart to investment scheme Hatch for $5.99 per month or $59 a year.

It is offering free membership to TheMarket Club for 60 days in November, and 30 days in the month of December.

Membership of Amazon Prime is £7.99 in Britain, and $12.99 in the United States.

The Warehouse's online shopping and lifestyle platform TheMarket first launched in August after 14 months under development, costing $12 million to build. The subsidiary is comparable to international lifestyle marketplaces ASOS and The Iconic and sells more than 1700 Australasian, British and American brands.

Between 15,000 and 20,000 Kiwis visit TheMarket each day - about 30 per cent above the level of traffic projected, and double the size of its database of users.

Justus Wilde, chief executive of TheMarket, said the plan for the site was "always to launch a subscription service", designed to make online shopping more convenient.

Wilde said TheMarket would expand the offering for TheMarket Club.

"We're starting with subscription around shipping and we will add member benefits depending on how people respond. Right now, it is entertainment and investment, we're looking into utilities and further entertainment options and potentially petrol offers; we'll expand the number of benefits," Wilde told the Herald.

"We're only three months in so it's dangerous to draw too many conclusions from what we're seeing but the engagement has been really strong.

"Now that we have subscription live, and going into Christmas, we're going to ramp up our investment in driving traffic to it."

Wilde said TheMarket Club offered an "interesting proposition" for its partner companies offering deals for subscribers, and gave shoppers a reason to shop on the platform.

"The whole value proposition here is convenience; come to one place, find everything in one place, be able to compare and contrast and discover new things all in one place with a shopping proposition across that," he said.

New Zealanders spent $4.2 billion online last year, which accounted for 9 per cent of total retail sales in this country.

Marketplaces represent between 25 to 80 per cent of online retail spending in major markets such as in the United States and Britain. The Warehouse anticipates spending at marketplaces in New Zealand will reach 25 per cent by 2025.

Justus Wilde, chief executive of TheMarket. Photo / Supplied

"Globally, marketplaces are taking a really big share of the e-commerce spend but in New Zealand that's not so much the case yet, so we think that will change and we're positioning ourselves to be able to take advantage of that," Wilde told the Herald in an earlier interview.

About 200 retailers now have their product listed on TheMarket platform, and another 250 have signed up to be rolled out on the platform in coming months.

Wild said he believed TheMarket Club had the potential to become the local equivalent to Amazon Prime membership. "We definitely have the opportunity to grow it into a significant business and take significant share of the market.

"If we keep focusing on the customer and growing our range and providing through the shipping offer or additional services then I don't see a reason why we don't have an opportunity to grow this into a really dominant player."

Warehouse Group subsidiary TheMarket launched in August. Photo / Supplied

He said TheMarket Club would evolve to offer more savings to "reward people for spending more" on the site.

Retail analyst Chris Wilkinson, managing director of First Retail Group, said TheMarket's move to operate a subscription model comparable to Amazon was a strategic attempt to snatch a dominant market share in the country's growing e-commerce market.

The Amazon-esque model would face some challenges in this market, however, given the size of the market and the number of bundle and add-on deals already available through telecommunications and utilities companies, he said.

Wilkinson said TheMarket Club would likely succeed with its membership if it offered too-good-to-miss offers, such as teaming up with major supermarkets.

"The Warehouse's work is admirable, but it is really going to rely on a critical mass of consumers to embrace this," he said.

"The offers have to be compelling and the benefits have to 'wow', and customers have to be ordering enough with TheMarket to make this worthwhile."

TheMarket is The Warehouse Group's first significant investment into the e-commerce space, though it already operates online-only businesses 1-Day, and Number 1 Fitness through the Torpedo7 brand.