The service of Jeff Bezos expanded his services in the South American giant, while the Argentine unicorn sees with concern his progress in the region
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<p><span style="background-color: #ffff99;">The most feared and - at the same time - event expected by Mercado Libre occurred: Amazon announced Tuesday that it will launch its Prime subscription service in Brazil, where it has fought hard competition in the largest economy in Latin America.</span>
Amazon Prime Brazil will be a reduced version of the United States subscription service, and will offer unlimited free shipping for approximately 500,000 of the 20 million products that Amazon currently sells in the neighboring country.
The two-day shipping service will be available in 90 cities, the company said. Deliveries to other urban centers will take three days or more.
In addition, Amazon Prime subscribers will also have access to movies, music and books and digital magazines on the Prime platform, to compete with streaming services such as Netflix.
The e-commerce leader is trying to overcome established local rivals, whose titles fell around 5% on the San Pablo Stock Exchange, namely:
– Free Market: -4%
– Magazine Luiza: -4.5%
– Via Varejo: 4-, 8%
– B2W: -5.6%
Nearly 60% of Mercado Libre's revenues come from the first Latin American economy, so the cimbronazo also felt it on Wall Street: its shares fell 3.85% on Tuesday, with a market valuation that was located in the United States. $ s27,150 million.
The launch of Prime represents Amazon's boldest measure in Brazil, where 2012 came with the sale of books before adding other products to the platform.
The firm has struggled to make progress in the country, where analysts pointed out logistic and fiscal problems among the challenges that the US giant has had to overcome.
The Brazilian Prime package will cost 9.90 reais ($ 2.42) per month, or 89.00 reais ($ 21) per year.
Argentina, which represents 20% of Mercado Libre's profits, is not yet in Amazon's plans, but sources familiar with the signature of Jeff Bezos say "this is a first step" to get closer to albiceleste lands.
Automated deposit
This service that Amazon offers in Brazil, Mercado Libre already provided in Rio de Janeiro and since this year also in Argentina, with a megadeposit that was built in the Central Market area, replicating the full fulfillment scheme.
In this way, Galperín's firm "planted a flag" in his homeland, due to the proximity of a landing of the store of the richest man on the planet.
"I was in Seattle a few years ago in the headquarter of Amazon, with all the staff. They were talking about Latin America following Colombia and Chile, not Argentina," says a high source consulted by iProUP.
The establishment that Mercado Libre has in the La Matanza party can classify, store and dispatch automatically – and in record time – thousands of products from those who sell on the platform so that they reach the respective buyers in less than 48 hours.
Marcos Galperín's investment is far from being random. Rather, it seeks to "mark" the field for Amazon, its most feared rival, by seeing how it continues to advance in Latin America.
In fact, the firm of Jeff Bezos has already deployed a content distribution network (CDN) in Colombia, which allows users in the region to access content hosted on Amazon servers faster. Everything indicates that it will be – together with Peru and Chile – one of the next places in its ecommerce service.
In addition, he maintains his idea of installing another Amazon Web Services (AWS) data center – his cloud computing service – in South America, more specifically, in Argentina or in the trans-Andean country.
It is a model in which the sellers of the platform, through some type of subscription –Amazon uses it for their customers "Prime" -, store their merchandise in their facilities.
In the case of Mercado Libre, the products that are in your megadeposit are highlighted and can be filtered: you have to look for the "Full" logo (followed by lightning).
In addition, the unicorn is advertising immediate shipments with a dotted bar that mentions the package tracking system similar to the one offered by Jeff Bezos.
"We are achieving a 30% sales growth," they point out to iProUP from one of the companies that started selling from the Mercado Libre megadeposit. They also emphasize that the operation expedited deliveries inside the country.
The new distribution center consists of the following stages, generally automated:
- Reception: products are received, classified and stored
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Purchase: once a user purchases the item, the inventory is updated
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Distribution: the product is searched, packaged and labeled with the delivery address
In all cases, the goods are entered in trucks, so these properties usually have large beaches to facilitate rapid circulation, in keeping with the speed at which the items are processed within the plant.
The center that installed Mercado Libre has:
– Area of almost 40,000 square meters, which can be expanded to 65,000
– Processing capacity of 14,000 packages per hour (300,000 per day)
– Enough space so that 74 vehicles at the same time per hour can receive and dispatch merchandise
In addition, it generated more than 200 direct jobs. The unicorn invested about $ 71 million for the automation of the entire operation and joined Plaza Logística, which, in turn, disbursed $ 615 million for real estate development.
The latter, in addition, obtained a loan from the OPIC (Overseas Private Investment Corporation), a government financial agency of the United States, for US $ 45 million, which was read as a way to accelerate its alliance with the unicorn in the field of Logistics
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