Brazil eTailers’ Shares Slide On Amazon Prime Debut

Amazon Prime package

News of Amazon Prime rolling out in Brazil caused some shares of eCommerce companies doing business in the country to drop, Reuters reported on Tuesday (Sept. 10).

Amazon is offering unlimited nationwide free shipping to Prime subscribers in Brazil for a monthly price of 9.90 reais (or $2.42). The company promises two-day shipping in 90 cities and perks that include access to the full content of its Prime video streaming service as well as music, digital books and magazines.

Amazon launched in Brazil in 2012, initially selling books and then adding more items, going up against established local eCommerce rivals including Magazine Luiza and Mercado Libre. Both companies saw shares drop over 4 percent with the news of Amazon bringing Prime to the country.

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

Amazon competitors also offer free shipping above a certain price, but none has an established entertainment component. However, Magazine Luiza started selling books online in April as a way to better compete with the eCommerce giant. Two of the country’s biggest booksellers — Saraiva Livreiros SA and Livraria Cultura — filed for bankruptcy protection last year and Magazine Luiza saw room in the market. Of Magazine Luiza’s 954 stores, 300 are in cities without any bookstores.

When Amazon first launched in Brazil, it concentrated on selling eReaders, books and streaming movies. In October of 2017, the company opened up its website to third-party merchants selling electronics. As a result, the company partnered with startup CargoX to launch a pilot program using bulletproof trucks for the delivery of expensive goods in the country.

Amazon also leased a 505,904-square-foot warehouse in a town outside of Brazil's largest city, Sao Paulo, and employs — directly or indirectly — more than 1,400 people in the country.

Amazon’s Brazil Country Manager Alex Szapiro said in January, “Our obsession is always to increase this catalog, and to have everything Brazilian consumers seek and want to buy on the internet.”



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