Unique: Amazon Eyes New Warehouse In Brazil E-commerce Push – Sources

SAO PAULO (P3P) – Amazon.com Inc (AMZN.O) is trying to lease a 50,000-square-meter warehouse simply exterior Sao Paulo, folks conversant in the matter informed P3P, because it steps up its push into Latin America’s greatest retail market, Brazil.

The logistics funding, which might be 4 occasions the dimensions of its present book-shipping operation within the nation, is an indication the web retailer could quickly deal with distribution of electronics and different items bought on its Brazilian web site.

That may be step one of its type for Amazon in Latin America’s largest financial system, the place it at the moment depends on third events to ship their very own items bought on its market, and it underscores the seriousness of the e-commerce large’s renewed push into Brazil.

Amazon declined to touch upon the attainable warehouse lease.

Whereas an estimated two-thirds of Brazil’s 209 million folks have web entry, on-line retail was gradual to take off at first, amid considerations over safety and issues with tax and logistics within the continent-sized nation.

E-commerce accounts for round 5 p.c of Brazil’s roughly $300 billion retail market — about half its share in the US — however it has doubled up to now 4 years and is forecast to continue to grow yearly at a double-digit tempo.

Now Amazon, which expanded its Brazil enterprise from books to electronics in October, is gearing as much as battle rivals corresponding to Latin Ameria’s homegrown e-commerce champion Mercado Libre Inc (MELI.O) and B2w Cia Digital, (BTOW3.SA) which is not directly managed by companions of personal fairness group 3G Capital.

“You clearly can’t underestimate an organization like Amazon,” mentioned Pedro Guasti, CEO of Brazilian on-line consultancy Ebit. “It has big capability to speculate and it’s clearly taking a much bigger chew of the cake than it did final 12 months.”

Mercado Libre Inc, B2w and native retailer Journal Luiza SA (MGLU3.SA) have gotten the soar on Amazon by storing and transport items showing on their web sites even when supplied by third-party sellers, to make sure pace and buyer satisfaction.

Amazon, against this, has been gradual to deal with the challenges of transport in a rustic the place tough logistics and tax points have lengthy made on-line retail an unprofitable enterprise.

After the P3P report that Amazon was eyeing the brand new Brazilian warehouse house, shares of Mercado Libre plunged as a lot as 7 p.c, whereas Journal Luiza dropped 5 p.c and rival By way of Varejo SA (VVAR11.SA) shed as much as 6 p.c. All three shares closed the day about three p.c decrease.

B2W misplaced as a lot as eight.5 p.c and closed 7 p.c decrease.

“Markets get spooked once they see an funding by Amazon,” a Brazilian dealer mentioned. “There may be worry that the corporate will change into extra aggressive with its technique in Brazil.”


In Mexico, Amazon has already taken a extra aggressive strategy, launching its third-party market coupled with its personal transport service, known as “Achievement by Amazon,” in 2015.

The distinction has been stark. Almost 20 p.c of critiques on Amazon’s Brazilian market are unfavorable, in contrast with 10 p.c in Mexico and simply four p.c in the US, in keeping with e-commerce analytics agency Market Pulse.

Complaints in Brazil usually deal with delayed or cancelled orders – an issue dramatically lowered in different nations when Amazon itself packs and posts orders of third-party items saved at its warehouse amenities.

In an early signal of Amazon’s Brazilian logistics push, the corporate posted greater than a dozen listings for distribution jobs within the nation to LinkedIn final 12 months, together with “Website chief, Achievement Heart”.

The brand new warehouse web site exterior of Sao Paulo, within the municipality of Cajamar, appears to be like to be a step in that path.

There San Francisco-based logistics firm Prologis Inc (PLD.N) has supplied a 50,000-square-meter house to Amazon in a brand new industrial park that hosts DHL and Samsung, in keeping with sources, who mentioned adaptation of the warehouse had not begun.

Prologis, which additionally partnered with Amazon on a mega-warehouse north of Mexico metropolis final 12 months, declined to remark.

The preparations in Brazil come as Luft, the native logistics operator for Amazon’s e book enterprise, readies a transfer into one other Prologis web site close by in Cajamar, sources mentioned, leaving its present 12,000-square-meter facility within the metropolis of Barueri.

Amazon registered in October to conduct operations in Cajamar, in keeping with municipal information seen by P3P.

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