LatAm List – It’s been seven years since Amazon entered the Brazilian market. With two distribution centers and a more limited selection than its local competitors, Amazon has not been able to fully compete with MercadoLibre Inc. and Magazine Luiza SA.
The Seattle-based company hopes to gain traction by introducing Prime services tailored to the local market. However, according to Bloomberg, “local firms have a firm grip on the market and are in little danger of succumbing to the American interloper”.
“If you talk to any company that delivers all over Brazil, it has a network that it developed with a series of partners… We’ve nailed it,” said Mercado Libre’s Chief Operating Officer Stelleo Tolda.
RBC Capital Markets Analyst Mark Mahaney stated that Brazil is probably Amazon’s second-most important international market. The tech giant relies heavily on its international operations to help alleviate slowing sales growth in the domestic market.
“It’s an important market for them to succeed… It’s one that they recently made a major initiative into, and it’s a bit of a test on how globally receptive consumers are to Amazon’s value proposition,” commented Mahaney on the Brazilian market.
According to Euromonitor International, Amazon could generate new international revenue even if it doesn’t take share from local competition.
“We’re in no hurry… what happens in the United States today took 25 years. We want to do it fast, but doing it right is more important than doing it fast,” said Alex Szapiro, Amazon’s Brazil Country Manager.
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