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Amazon Brings Prime Program to Brazil to Outflank Local Rivals

The service will offer free unlimited shipping for about 500,000 products out of the 20 million Amazon currently sells in Brazil, and two day-shipping will be available in 90 cities.
Amazon Prime package | Source: Shutterstock
By
  • Bloomberg

SAO PAULO, Brazil — Amazon.com Inc is bringing its Prime membership program to Brazil in an effort to leapfrog competitors and gain traction in a country where it has been expanding slowly but surely.

To start, Amazon Prime Brazil will be a scaled-down version of the US subscription service, offering free unlimited shipping for about 500,000 products out of the 20 million Amazon currently sells in Latin America’s largest economy. Two day-shipping will be available in 90 cities, the company said. Deliveries in other urban centres will take three days or more.

Amazon, which entered Brazil in 2012, is battling established e-commerce competitors, including MercadoLibre Inc. which offers free shipping if shoppers spend a certain amount. B2W Cia. Digital, another local rival, offers its own “prime” delivery service with unlimited free shipping, among other perks. Amazon operates two distribution centres in Cajamar, near Sao Paulo, Brazil’s largest city.

“This is a country in which we’re investing for the long run,” Amazon’s Prime and Marketing Vice President Jamil Ghani said in an interview. “Prime is the crown jewel of the consumer business at Amazon.”

Amazon Prime Brazil will offer entertainment perks, including Amazon music, books, games, local magazines and the full content of Prime Video. Amazon currently charges 14.90 reais ($3.64) monthly for its streaming service in Brazil. That compares with 9.90 reais monthly for the beefed-up full Prime membership.

While e-commerce is still small in Brazil, it has been growing fast, driven by the proliferation of smartphones. Sales rose 41 percent in the last two years, according to Nielsen’s e-commerce researcher Ebit. That compares with 7.3 percent growth for retail as a whole, according to data from Brazil’s Geography and Statistics Institute.

Brazil is the 19th country to offer Amazon’s membership program, Ghani said. Launched in 2005 in the US, Prime helped persuade shoppers to see the retailer as more than just a bookstore. Surveys show Amazon Prime members spend more than non-members.

Prime’s growth in the US has slowed, prompting Amazon to focus on expanding the service globally, including in countries like India. Amazon Prime has more than 100 million members worldwide, including, analysts estimate, a majority of US households.

Amazon debuted in Brazil in 2012 selling e-books. In 2017, it launched a marketplace operation, starting with electronics and appliances. In January, Amazon started selling directly to consumers in 11 categories, including beauty, personal care and baby products. Amazon doesn’t disclose its Brazil revenue.

By Fabiola Moura, with assistance from Matt Day, Adriana Dupita; editors: Nick Turner, Robin Ajello, Molly Schuetz.

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