Amazon’s Nearly $40 Billion Opportunity in Brazil

Amazon expands direct sales in Brazil

Amazon (AMZN) recently started direct sales of merchandise beyond books in Brazil after months of delays, Reuters reported. The delays were caused by logistics and tax-related issues, according to the report.

Launching direct sales marks Amazon’s major expansion in Brazil, Latin America’s largest economy. Amazon entered the Brazilian market in 2012, initially selling books. But Amazon’s expansion in Brazil has generally been slow until recently.

Amazon’s Nearly $40 Billion Opportunity in Brazil

Attractive growth opportunity

Amazon launched direct sales in Brazil with 11 categories of items sourced from more than 800 suppliers. The Brazilian market presents an attractive growth opportunity for Amazon. According to a report from global payments technology company Worldpay, Brazil has a robust e-commerce industry. In 2018, the Brazilian e-commerce market was worth $27.6 billion and is on track to grow to $38.5 billion by 2022. A former Apple executive, Alex Szapiro, is leading Amazon’s charge in Brazil.

Retail sites’ popularity in Latin America

Although Amazon expanded slowly in Brazil, it remains a formidable retail force in the Latin America region. According to a report from eMarketer, Amazon operates the second-most visited retail sites in Latin America as of May 2018. Alibaba (BABA) and eBay (EBAY) ranked fourth and fifth, respectively, in terms of retail site popularity in Latin America in that period. Walmart (WMT) and Google (GOOGL) ranked eighth and ninth, respectively, on the basis of retail sites’ popularity in Latin America.