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.
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.
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.
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.
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.
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