Amazon Unveiled Prime Day Amid Tough Competition from Local Rivals in Latin America

The world’s leading online retailer, Amazon.com Inc. or Amazon has unveiled its grand annual shopping event, Prime Day, which offers heavy discounts and other promotional activities including free shipping to its existing customers. The seattle-based e-commerce giant is offering two days shopping event to be held from 13 October to 14 October across 19 countries in attempts to boost its sales as well as attract its Prime membership.

Although the e-commerce giant had witnessed significant expansions over the years, it is still facing struggles in Latin America due to the tough competition from local retailers in the region. Keeping a view of its operation expansion, Amazon included Mexico in the event and rolled out its first time Prime Day event in Brazil.

E-commerce giant witnessed a rapid surge of its sales due to the COVID-19 pandemic that had forced to shut shops worldwide and consumers relied on online platforms to avoid virus infection. The giant usually holds its promises discounts for Prime members in mid-July but had decided to hold the event later this year due to the pandemic.

Amazon Prime Day Launch in Latin America

Amazon started its online retail operations in Mexico in 2015 and Brazil in 2017, two big economies in Latin America. Launching Prime Day in these two countries could be an imperative test for Amazon as it has been aiming to penetrate its retail business in the region and the outcome would be a great lesson for the retail giant.

In Mexico, the retailer is currently offering a charge of 99 pesos ($4.67) a month or 899 pesos ($42.38) a year for a Prime user, who could also avail of other facilities included in the subscription such as free music, games, and original television along with free shipping. Lyana Kahn, the founder of a Mexican jewelry company LuckyLy, said that she had benefitted from Amazon’s Prime shipping and discount perks for customers and added, the Prime facility “has been one of the biggest engines of growth that we’ve had in the country.”

Amazon’s entry in Brazil is relatively new and it has started its Prime memberships just a year ago. The company is offering a cost of 9.90 reais ($1.79) a month or 89 reais ($16.09) a year in Brazil and it has witnessed the fastest subscription growth of any Prime market, with members now in 95% of municipalities, Amazon said in a statement.

Amazon Facing Challenges from Local Rivals

Despite the new developments, Amazon is still facing challenges from the local rivals, which have already established its markets with well-maintained sellers and consumers. Reflecting on Amazon’s current market position, the president of Buenos Aires-based eCommerce Institute Marcos Pueyrredon said, “Amazon in Latin America is not the monster that it is in the United States.”

According to the media analytics firm ComScore, the retail giant has been trailing second behind Argentina’s MercadoLibre for most unique visitors in August in Mexico. Meanwhile, Amazon ranked fifth in the sale volumes in Brazil after MercadoLibre and local e-commerce powerhouses like B2W, Via Varejo, and Magazine Luiza.

Meanwhile, the head of marketing for Amazon in Mexico, Gloria Canales said that the company was pleased with the growth rate in the region and added, “We strive every day to add selection, to improve shipping rates, to improve our payment methods. We’re confident that that’s what makes us successful.” Analysts suggested that Amazon, which made its biggest sales in its 26-year history, would afford to compete with local rivals in the long run.