Brazilian e-commerce, get ready: Amazon is really coming

While advances in physical retail in the United States, Amazon is on the way to extending its virtual tentacles in Brazil. After four years just selling books and kindles on e-commerce, retailer starts negotiating with retailers of smartphones, notebooks, tablets and accessories to sell them on its marketplace. Initially, the idea is just to deliver the products, but there are plans for the company to also store the storekeepers' goods in distribution centers throughout the country. Expectations are for this operation to begin operating in the third quarter of this year.

Many believe that Amazon will only arrive by replicating what is already done by other e-commerces in Brazil. That is, we will have extended delivery times, mainly for cities far from the Rio-São Paulo axis, to circumvent the country's traditional logistical inefficiency and avoid possible penalties. In this way, Amazon would be just another e-commerce option, but one that would rely on the strength of its brand to gain market share.

All good. It's not just logistics that holds back companies in Brazil. Bureaucracy, tax madness, physical and legal insecurity, lack of qualified labor, all of this must have also contributed to this period of maturation for Amazon in the country. But, as my subject is logistics, I am in doubt: will Amazon really just replicate the traditional Brazilian logistics inefficiency or has it found a way to bring its level of service to the country and really differentiate itself from the rest of the market?

I support the second option, and explain. For a company used to sometimes delivering in less than 24 hours in large North American cities, having to submit to the usual Brazilian practice of long delivery times, in order to be able to guarantee them, would be almost an attack on the soul, and to the brand! After all, in addition to being the “everything store”, it is also known for its high level of service, with a strong culture of customer concern.

But here comes the crux of the matter: how would Amazon offer better service levels facing all the logistical problems we experience on a daily basis? One option would be to buy a carrier, although it could also find it difficult to impose its culture. Another would be to squeeze a lot of local service providers to achieve levels of services that are unusual in the country, especially outside the Rio-São Paulo axis.

In any case, when Amazon enters a market or segment, it invariably arrives with a bang, with high service levels and low prices, even at a loss, literally suffocating the existing market. I can't imagine why it would be different in Brazil and I believe it will shake up national e-commerce. Options, creativity and knowledge, Amazon has plenty of and we will continue to follow its next steps.