SAO PAULO, Aug.4 (Reuters) – E-commerce giant Amazon.com Inc (AMZN.O) on Wednesday began offering its Brazilian Prime subscribers free shipping to 50 cities, amid fierce competition in the the largest economy in Latin America.
The move comes as competitors such as MercadoLibre (MELI.O) and Magazine Luiza (MGLU3.SA) are investing heavily to accelerate delivery speeds and gain customers.
The Amazon initiative, which already exists for Prime subscribers in the US, Canada and UK markets, comes two years after Prime’s first launch in Brazil. Previously, Prime users in Brazil had access to free two-day delivery with the option to pay extra for one-day delivery.
âOver the past year, we have developed better infrastructure, especially in the country’s capitals with new distribution centers, and this is what made one-day delivery possible,â he told Reuters Mariana Roth, head of Amazon Prime in Brazil. .
Competition in e-commerce is fierce in Brazil, home to approximately 105 million e-commerce buyers. Amazon ranked fourth in the country in terms of monthly website visits, behind regional and national competitors MercadoLibre, Americanas (AMER3.SA) and SoftBank-backed OLX, according to a ranking compiled by payments company Ebanx.
Logistics is a particularly delicate part of Brazilian e-commerce, in a country of continental size with uneven infrastructure. Earlier this year, MercadoLibre announced a 10 billion reais ($ 1.91 billion) investment in logistics in Brazil, where, since June, it has experimented with same-day shipping to select cities.
Roth didn’t say how many new Prime users the initiative is expected to attract, or how much revenue it is expected to generate for the company.
($ 1 = 5.2424 reais)
Reporting by Jimin Kang; Editing by Sandra Maler
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