Amazon announced it has opened three new distribution centres in Brazil to decrease delivery times in different regions of the country.
Largest logistical expansion in the country
The three new distribution centres are located in Minas Gerais, Distrito Federal, and Rio Grande do Sul, and mark the largest logistical expansion for Amazon in the country so far. Amazon now operates eight distribution centres to serve shoppers across Brazil. The new centres enable more than 500 towns and cities to have faster deliveries for Prime members, starting at two days for eligible products.
Prime members also receive free shipping. Amazon said it has seen the fastest growth in Amazon Prime subscriptions since its launch in September 2019. Operational excellence and quick, trust worthy service, are key parts of the Amazon Flywheel, which is reflected in this expansion. This results in more customers visiting the site which will attract more sellers or vendors, leading to an even greater selection for shoppers.
Increasingly competitive market
Amazon expanding its ecommerce offering will be a cause of concern for competitor MercadoLibre. The ecommerce retailer has been investing in its own logistics network. For example, it recently announced an investment of BRL200m (US$35m) per year in the “Meli Air” aircraft fleet. It is launching its own dedicated aircraft fleet to ship products, with the aim of shortening delivery times across Latin America. The four aircrafts will be operated by existing cargo carriers in Brazil. The retailer is also launching four aircrafts in Mexico. As the demand for ecommerce continues to rise in Brazil, we expect this area of the market to become increasingly competitive.
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