Amazon bets on Prime Day in Latin America to battle local rivals

In this news, we discuss the Amazon bets on Prime Day in Latin America to battle local rivals.

MEXICO CITY (Reuters) – Amazon.com Inc’s total sales have skyrocketed during the coronavirus pandemic, but in Latin America, the world’s largest online retailer is locked in a scuffle with local rivals as it is deploying its Prime Day event in Mexico and, for the first time, Brazil.

At the annual Tuesday and Wednesday shopping event that spans 19 countries, the company will once again showcase the discounts and free shipping that come with a paid Prime membership – a strategy that has helped Amazon attract buyers. regulars from all over the world.

Despite this, analysts say Amazon faces an uphill battle in Latin America’s two major economies, where success or failure will set the bar as to whether it can take on the rest of the region.

“Amazon in Latin America is not the monster it is in the United States,” said Marcos Pueyrredon, president of the Buenos Aires-based Institute of Electronic Commerce.

Amazon does not publish country specific sales data, but traffic statistics on the site Web suggest that Amazon is struggling to keep up with MercadoLibre in Argentina.

In Mexico, where Amazon launched its marketplace in 2015, it was second behind MercadoLibre for most unique visitors in August, according to media analytics firm ComScore.

In Brazil, a more fragmented market that Amazon joined in 2017, it ranked fifth after MercadoLibre and local e-commerce powerhouses like B2W, Via Varejo and Magazine Luiza.

Gloria Canales, head of marketing for Amazon in Mexico, said the company is happy with its growth in that country and will continue to invest.

“Every day we strive to add selection, improve shipping rates, improve our payment methods. We are convinced that this is what makes our success. “

It’s not as if Amazon, which made the biggest profit in its 26-year history in July, can’t afford to play the long game.

Prime, which in Mexico charges users 99 pesos ($ 4.67) per month or 899 pesos ($ 42.38) per year and offers a slew of original music, games and TV along with free shipping, “a has been one of the biggest growth engines we’ve had in the country, ”she says.

Just in time for Prime Day, Amazon recently opened its first so-called distribution centers outside of the Mexico City area, one in Guadalajara and another in Monterrey.

These huge warehouses with stocks of key products will help expedite shipments to more regions.

In Brazil, where Prime costs 9.90 reais ($ 1.79) per month or 89 reais ($ 16.09) per year, Amazon started offering subscriptions just over a year ago. Since then, it has seen the fastest subscription growth of any Prime marketplace, with members now in 95% of municipalities, Amazon said in a statement.

Yet Prime alone may not be enough to boost Amazon’s fortunes, said Gene Munster, managing partner of Loup Ventures, highlighting inventory and distribution as two key areas where Amazon needs to improve.

“It’s definitely growing,” he said of the Prime program. “But it’s not about growth, it’s about trying to keep pace with MercadoLibre.”

This can be a challenge despite the fact that the local champion does not have a membership benefit program on par with Prime. In addition to MercadoLibre’s progress since its founding in 1999, the company has a large seller base and understands the local ground.

Lyana Kahn, founder of Mexican jewelry company LuckyLy, said her sales on Amazon have benefited from the shipping and discount benefits of Prime for customers.

“It’s a great platform that allows you to reach more customers without a huge investment,” Kahn said. Even so, LuckyLy also sells her sparkling earrings and gold plated necklaces on several others. sites, including MercadoLibre.

“Each platform has something different to offer,” Kahn said. “There is room for everything.”

($ 1 = 21.2110 Mexican pesos; 5.5316 reais)

Reporting by Daina Beth Solomon; Edited by Christian Plumb and Richard Chang

Original © Thomson Reuters Corporation

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