Amazon, Trucking Startup CargoX Team On Brazilian Logistics

Amazon is partnering with startup CargoX on a pilot program that will use bulletproof trucks for the delivery of expensive goods in Brazil.

Bloomberg cited a source who revealed that the eCommerce giant is working on the logistics project with Goldman Sachs-backed CargoX, which connects truckers with companies requiring their services. As of June, it had about 7,000 drivers registered.

After selling books in Brazil for five years, Amazon finally launched an electronics and household appliances marketplace there a year ago. MercadoLibre currently holds the top spot in the eCommerce market in Brazil, while Amazon.com.br is at No. 11 behind companies including B2W Cia Digital, Magazine Luiza SA and Alibaba’s Aliexpress.

Amazon has been working hard to boost its presence in the region. Earlier this year, it was reported that the Seattle-based company was looking to lease a 50,000-square-meter warehouse near São Paulo. In addition, Amazon is also said to be heavily recruiting Grupo Boticário and Natura Cosmeticos — two rising brands in Brazilian beauty — to sell via its Brazil platform. The move represents an early play by Amazon on the world’s fourth-largest market for beauty products. As of 2018, Brazilians spend roughly $30 billion a year on makeup, hair treatments and other wellness and self-care products. The only nations that see more beauty sales are the U.S., China and Japan.

Online sales in Brazil are also expected to increase by 12 percent to 53.5 billion reais ($13.7 billion) this year. However, logistics remains an issue for all retailers: Delivery is mostly done by trucks, even though the country is about the size of the continental U.S. and many roads are unpaved. Safety is another concern, as road robberies are so common that most news outlets don’t even cover them anymore.

As for the pilot program, Amazon said in an email it doesn’t comment on rumors or speculation, while CargoX declined to comment.