It is reported that Amazon is working on a new logistics pilot project in Brazil to help it increase its toehold in the vital South American market. According to reports, Amazon is already working with CargoX, which is sometimes called Brazil’s “Uber of trucking” improve the delivery systems in place in the growing economy there.
Several specific challenges face Amazon as it builds out a delivery network in Brazil and that’s one reason why an experienced player in the country with local knowledge makes enormous sense. Firstly, needless to say, Brazil is absolutely enormous: it’s roughly the same size as the continental United States. The landscape is also not particularly benign, not least with Amazon’s namesake river present a significant physical barrier, that needs to be traversed. In rural interior areas too, roads are often primitive and often un tarmac.
And then there is also the risk of bandits. The reports say that new vehicles that Amazon will be employing will be bullet-proof to safely transport more expensive items such as electronics in remote areas where there is an enhanced chance of attacks and robbery.
We know that Amazon is keen to increase its geographical footprint. The Seattle-based ecommerce behemoth is making billions of dollars of investment in India and China in order to get a share of the local ecommerce markets there. Amazon Turkey opened for business just last month and obviously Amazon Australia started trading nearly a year ago, but has been somewhat blighted by the GST (goods and services tax) that has proved to be a problem down under for ecommerce. Amazon wants to be truly global.
And obviously Central and South America represent an enormous commercial opportunity in that quest. And whilst the area is closer to home than the Spanish prospects, it is also problematic. There is already an entrenched and dominant player in the field in the shape of MercadoLibre and it is difficult to challenge a homegrown and established favourite. And whilst Amazon Brazil has expanded from purely selling books in recent months to more verticals, it is also still paying for a sluggish start in the region. We will see if it can reverse those fortunes in due course.
