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An Overview of Amazon in Latin America

March 2019

Amazon has long been a relevant internet retailer for Latin America thanks to cross-border purchases. In recent years, the company has been more proactive in Latin America, launching localised e-commerce operations in Mexico and Brazil, and beginning to launch Echo in the region. Amazon’s development in Latin America provides insights into how to compete against Amazon, in Latin America and elsewhere, as well as lessons for other retailers looking to expand in Latin America.

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Key Findings

Amazon’s presence in Latin America continues to grow

Amazon has long been a relevant internet retailer for Latin America thanks to cross-border purchases. In recent years, the company has been more proactive in Latin America, including launching localised e-commerce operations in Mexico and Brazil. At the end of 2018, Mexico had the most Amazon features and services of all Latin American markets.

Amazon’s route to market entry in Latin America follows a pattern

In Mexico and Brazil, Amazon began priming markets with cross-border internet retailing sales from Amazon.com, introducing digital services such as Amazon Music, and selling Kindles and e-books before launching localised retail operations. Companies in other regions should note this pattern of expansion and consider it when evaluating Amazon’s entrance.

Local knowledge of payments, logistics, and business environment provide advantages for competing against Amazon

In Mexico and Brazil, Amazon turned its attention to key topics such as introducing local payment options and offering preferred delivery options only after launching full operations.Companies looking to compete against Amazon in Latin America or elsewhere should use their local market knowledge to proactively address these topics.

Lack of physical locations is expected to hinder Amazon’s progress in the region, providing another opportunity for competitors

Well-designed and well-located brick-and-mortar locations can serve a range of functions in every market, but they are exceptionally important in Latin America. While Amazon is working to add brick-and-mortar touchpoints primarily through its partnership with OXXO in Mexico, competitors that are able to leverage existing stores immediately have an advantage when stores are used correctly.

Amazon is looking to build an ecosystem in Latin America and elsewhere; competitors should consider doing the same

While Amazon’s media subscriptions, payment methods, and Alexa-enabled devices are much more established outside Latin America, it is clear that Amazon intends to grow these features there as well. Companies competing with Amazon in retail should not ignore these potential revenue streams, and consider building their own or teaming up with local providers.

Scope
Key findings
Overview of Amazon in Latin America
Amazon in Mexico
Amazon in Mexico: opportunities and challenges
Amazon in Brazil
Amazon in Brazil: opportunities and challenges
South America: state of development
Beyond retail: Prime in Latin America
Beyond retail: Amazon Cash
Beyond retail: Amazon devices in Latin America
Looking ahead: challenges, opportunities for Amazon in Latin America
Looking ahead: lessons from Amazon’s expansion into Latin America
Appendix: table of Amazon services by country as of December 2018
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