Amazon.com brings Prime service to Brazil; local retail shares drop

A roll of Amazon Prime packing tape is seen at the Amazon fulfilment centre in Baltimore, Maryland, US, April 30, 2019. — Reuters pic
A roll of Amazon Prime packing tape is seen at the Amazon fulfilment centre in Baltimore, Maryland, US, April 30, 2019. — Reuters pic

SAO PAULO, Sept 10 — Amazon.com Inc said today it will launch its Prime subscription service in Brazil, where it has struggled against tough local competition in Latin America’s largest economy.

Shares in Brazilian retailers tumbled after Amazon announced it is offering Prime subscribers unlimited nationwide free shipping and a maximum 48-hour delivery time in over 90 municipalities for goods ranging from clothes to electronics.

The leading ecommerce company is trying to dislodge established local e-commerce rivals including Magazine Luiza and Mercado Libre.

Shares in Magazine Luiza fell over 4.5 per cent, while shares in Via Varejo fell 4.8 per cent and shares in B2W fell 5.6 per cent.

Amazon Prime subscribers will also have access to movies, music, and digital books and magazines on the platform, as Amazon looks to compete with online streaming services like Netflix.

The Prime launch represents Amazon’s boldest move in Brazil, where it launched in 2012 as a bookseller before adding other products to the platform.

It has struggled to make inroads against the incumbents, with analysts flagging logistical and tax issues among the challenges the US giant has faced before launching more products and services.

“We went as fast as possible and as slowly as necessary,” Jamil Ghani, Amazon Prime international vice president, told Reuters.

The Brazilian Prime package will cost 9.90 reais (US$2.42) a month, or 89.00 reais a year. — Reuters

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