It has been reported that Amazon is in talks with the Brazilian airline Azul. The aim is to improve fulfilment and delivery in the vast country and difficult market of Brazil that is fraught with logistical difficulties. This has somewhat stifled the growth of ecommerce in one of the world’s fastest growing nascent economies. Amazon is subject to stiff local competition.
The sheer scale of the country (it’s bigger than the contiguous United States) and its challenging geography make it a complex country to fulfil goods within. And there are also security problems in some regions making air travel vital to developing a delivery network.
Azul is the most popular Brazilian airline, serving 50% more airports than its nearest rival. Currently ecommerce only accounts for roughly 5% of Brazilian retail but it has doubled over the past 4 years and growth is accelerating, with double digit expansion expected every year in the foreseeable future
Needless to say Amazon hasn’t commented on the rumours. Azul has remained tight-lipped too. But all recent moves have suggested that Amazon is seriously looking at Latin America’s biggest economy. Thus far, Amazon hasn’t made much of operations there. It opened an ebook outlet in 2012 and started offering paper books 2 years later. Last autumn it opened its doors as a third-party marketplace and merchants can sell on there now too. But it’s not a developed national site.
This move does seem to signal that expansion is on the cards in Brazil and that could be good news for merchants who want their share of Brazilian retail. And other plans afoot will be of interest. Thus far merchants have been required to fulfil orders themselves but in February it was reported that Amazon has been sizing up a 50,000 sq metre warehouse just outside the city of Sao Paulo which could be a sign that they are considering a launch of FBA in Brazil too.
