One week after its launch, Amazon Mexico is drawing praise and criticism in near equal measure as analysts keep an eye on the effect of the mega-online emporium on local retailers and traditional markets.
While Amazon offers books for sale in Brazil, the Mexico site is Amazon’s first foray into the larger consumer market; in fact, the company boasted that Amazon.com.mx represented the largest, most varied roll-out among all of its international sites to date. Shoppers can make purchases in 10 different categories, including Consumer Electronics; Kitchen & Home; Sports & Outdoors; Tools & Home Improvement; Baby; Health & Personal Care; Watches; Books; Music and DVDs; and Video Games and Software. The company is attempting to entice buyers by offering free shipping on first purchases; subsequent shipments are free if the total cost exceeds 599 pesos (about US $38).
Amazon is far from the first online retailer in Mexico — in fact, it’s entering a fairly dense field of competition. However, Amazon executives believe they’ll corner the market easily with their widespread brand recognition, competitive pricing and delivery policies (next-day in Mexico City, Guadalajara and Monterrey), as well as their logistics plan and sheer amount of labor and space: the company owns a 700,000-square-foot distribution center in a town approximately 45 miles from Mexico City.
The timing is right, say analysts, because e-commerce is poised to grow exponentially in Mexico this year. Certain retail sectors are expected to do particularly well — such as books, which are far more affordable via Amazon compared to prices at traditional retailers in Mexico, and specialty items from other countries that can be hard to find or extremely expensive. Case in point: the first item that sold on the site, according to a gaming website, was a Japanese anime figurine.
But if Amazon really wants to corner the market, it’s going to have to do better in the cultural competence department. Despite the fact that the Mexico division is headed up by a Mexican businessman, the homepage of Amazon.com.mx is a predictable mix of objects that reflect Mexican identities and realities (the wide-screen TV features a panoramic photograph of Mexico City’s Zócalo) and items, such as watches and Fitbits, that could easily have been made more relevant by changing language settings to “Spanish” rather than “English.”
Ultimately, economists will also be looking at other ways in which Amazon’s arrival in Mexico affects the economy. In addition to scrutinizing its impact on local retailers, analysts will likely examine whether Amazon contributes to job creation and what impact the mega-store has on Latin American e-commerce retailers who already have a toehold among Mexican consumers.