Amazon.com plays catch-up in Brazil as local rivals thrive

SAO PAULO: Claudia Maria de Oliveira is leery of online shopping. But while browsing social media recently, the 49-year-old Brazilian spotted a bargain-priced sandwich press from local retailer Magazine Luiza SA.

She swallowed her doubts and hit the "buy" button.

Two days later she picked up her first-ever online purchase at a mall in Sao Paulo. "I took the risk," said Oliveira, who cleans offices for a living. "If I have any trouble with it, at least I know I can come back to the store.

"A reassuring physical presence and fast-growing online sales have vaulted Magazine Luiza into the upper echelons of Brazilian e-commerce, lifting shares over 500 percent last year and 20 percent so far in 2018.The company is relying on deep roots in its home turf to survive an assault by Amazon.com Inc, which is revving up operations in Latin America´s largest economy six years after entering the market.

Reuters has reported that Amazon is eyeing a major warehouse outside Sao Paulo, negotiating a nationwide air cargo deal and lining up local suppliers of everything from personal electronics to perfume and home appliances.

But the American giant may struggle to dominate retail in Brazil as it has elsewhere, according to a dozen executives, analysts and investors interviewed by Reuters.

They compare the state of Brazilian e-commerce to that of the U.S. market 10 years ago only Amazon´s slow rollout here gave rivals a chance to prepare.

Helped by Brazil´s richest man and search giant Google, competitors are copying many of Amazon´s signature moves.

Those strategies have sped up delivery, earned customer loyalty and boosted offerings through partnerships with third-party sellers. And unlike Amazon, home-grown players such as Magazine Luiza have decades of experience with the country´s working-class consumers and tangles of red tape key survival skills in Brazil´s retail jungle.

"We see room for several players," said Eduardo Carlier, a fund manager at AZ Quest Investimentos, a major shareholder in Magazine Luiza.

"We think the winner-take-all model that played out in the United States is going to be tempered in Brazil.