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Amazon Bolsters E-commerce Presence With Brazil Initiative

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Amazon AMZN is leaving no stone unturned to bolster presence in the online retail space on the back of its vast and robust e-commerce platform.

Reportedly, the company is gearing up to make its foray into the clothing, accessories and footwear market of Brazil via its Brazilian marketplace.

Recently, Amazon has announced its plans to enhance product offerings by bringing a wide variety of fashion apparels and active sportswear ranging from designer Reinaldo Lourenco’s collection to Alpargatas’ Havaianas flip flops to Levi’s Jeans. The company intends to sell it through its e-commerce platform in the country and have them delivered by third-party vendors.

The latest move of the company will strengthen its footprint in Brazil which is in sync with its continued focus toward expanding presence in the Latin American region.

Coming to the price performance, shares of Amazon have returned 62.9% on a year-to-date basis, outperforming the industry’s growth of 30.8%.


Brazil Holds a Promise

Per the latest report from Statista, revenues in the e-commerce market of Brazil are expected to touch $21.3 billion in 2018. Further, revenues are expected to reach $31.7 billion by 2022 at a CAGR of 10.4% between 2018 and 2022.

This immense growth potential of the market can be attributed to rising demand for apparel in the fashion world.

Revenues in the fashion segment are expected to advance $10.9 billion by 2022 by at a CAGR of 10.9% between 2018 and 2022.

We believe Amazon is well-poised to gain momentum in the country’s e-commerce market with the help of its aggressive retail strategies and robust delivery system.

Amazon in Brazil

The company made its foray into the Brazilian e-commerce market in 2012 and its expanding product portfolio bodes well. In fact, its strong efforts to bolster market share by improving its customer base in the country will further drive top-line growth.

Apart from the fashion and clothing segment, the company has presence in the country’s online book and electronics retail market.

Reportedly, the company is in talks with Casino to acquire the latter’s Via Varejo SA unit, which is the third-largest e-commerce platform operating in Brazil with more than 900 stores selling appliances and electronics.

Notably, all these endeavors will continue to aid the company in gaining competitive edge against the domestic retail companies like Magazine Luiza, B2W and MercadoLibre (MELI - Free Report) , one of the dominant player in the e-commerce space of Latin America.

Furthermore, Amazon, by gaining traction in the online retail sector of Brazil, is also strengthening its competitive position against Walmart WMT and Alibaba BABA, its two big rivals globally.

Currently, Amazon sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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