Amazon’s Major Expansion In Brazil
The most popular and significant e-commerce retail business, Amazon.com Inc. decided to enter the world of Brazil. Amazon started as a book-selling website, and today, we can expect that it will expand in Latin America’s largest country and market, and enter the world of Brazil.
According to Bloomberg, Amazon will start selling electronically next week, because there is a high demand for it and it is simple to transport. They will add more products by the end of this year.
The main problem could be the Brazilian retailers fall after Amazon gets its market share. Of course, they started to sell books and have their operating marketplace in Brazil. That is the main reason why Digital went down for 15%, and Lojas Americanas SA lost 4.8%. At the same time, we have to mention MercadoLibre Inc. that dropped two percent because it contains significant operations in Brazil.
Amazon gained gross merchandise of $63.4 million in 2016, and we can expect that it will increase by 20% after they expand in Latin America. The reason for market changes is because it is overreacting.
The move of Amazon will not disrupt the market, mainly when you have in mind that the company may face some problems and challenges so that it can expand further. They will need quite some time to establish their system in Brazil so that it Can Become A Significant Market Contender.
E-Commerce In Latin America
Even though e-commerce is something that started two decades ago in countries such as Brazil, there is plenty of room for different web sales in Latin America. When we keep in mind that 500 merchants existing in Latin America increased by 23% in the last few years, we have to put that in a global context and say that Latin America contains the second fastest growing e-commerce behind China.
Latin America’s e-commerce retailers grew faster than those in the United States, where online selling and buying was only 17% in 2016. When it comes to most prominent online merchants in Latin America, we have to mention B2W Digital, Nova Pontocom, Maquina de Vendee, Netshoes, Magazine Luiza, Saraiva e Siciliano from Brazil; these companies together grew 25% of the overall web sale to approximately nine billion dollars.
Amazon In Latin America
The most prominent merchant in Latin America is only one company that we all know about – Amazon.com. Even though it is one of the ten quickest expanding merchants in the world and outside the region, it is one of the best web startups that grew amazingly. Today, you can combine all the retailers from Latin America that are just a small portion of the Amazon international revenue. When it comes to Latin American market, especially Brazil, Amazon grew from web sales eight times faster than in Europe and three times faster than in China.
However, Amazon is still a newcomer to Latin America and Brazil, because it launched its site in Brazil in 2012 with lots of products from e-books that you can read on Kindle. Even though they don’t speak too much about Brazilian plans, we can expect that they will add printed books in Portuguese to the commerce site and that electronic devices will be the first line that will expand all over the country.
Amazon And Its Effect On Other Online Retailer Systems
We can assume that customers from Latin America and Brazil will shop for different stuff online, and the only idea is to craft a better future strategy that will create a perfect environment and system for the online retail business.
The main downside is that the other Brazilian-based online retailer groups will be in the shadow of the Amazon giant. But there is no problem with that because the market will evaluate itself and we can only assume that there will be competitive prizes in the war for the market.