amazon Amazon: coming soon?

Amazon expected to announce new site

Press conference scheduled for Tuesday in Mexico City

After weeks of rumors in e-commerce circles in Mexico, the online retail giant Amazon may soon expand its presence here beyond e-books and Kindle readers.

The company will hold a press conference Tuesday in Mexico City, where it is expected to announce the launch of a new online store along the lines of its U.S. site, selling everything from electronics to household appliances.

Analysts say Amazon’s arrival in Mexico could serve to revolutionize some aspects of the e-commerce sector: rapid electronic payments in a country that is still to a large degree unbanked, the logistics of delivery and the quality of service to the consumer.

Improvements in those areas could help detonate the growth of e-commerce.

“Amazon has raised the bar in the market for Internet purchases by controlling in a massive way the delivery times of its products and its customer service,” said Yory Wurmser of the consultancy eMarketer. “It has a clear determination to meet the demands of consumers.”

The company, which enjoys about 20% of Internet–based sales in the U.S., is known to invest heavily in customer service, for which it is prepared to lose money.

Mexico is not a highly-developed market for Internet sales. The Mexican Internet Association (Amipci) says sales in 2014 were just US $11 billion while in the U.S. they were over $305 billion.

But last year’s sales were up 34% over 2013, growth that is expected to continue.

Companies such as the Argentinian firm MercadoLibre, Rocket Internet’s Livio, Walmart, Costco and Liverpool will be Amazon’s chief competitors. Walmart, Mexico’s largest retailer, has invested heavily in its e-commerce platform since 2013 — 3.4 billion pesos in total (US $218 million) — and is expected spend another 2.4 billion pesos this year.

In the long run what this all means boils down to good news for consumers.

“They will have better prices, better selection, better delivery and better service,” says Michelle Grant of the consultancy Euromonitor. “Amazon is one of those companies that has a strong commitment to its customers . . . .”

It operates with a long-term vision and it’s clear that making a profit for its investors is not important, she said.

Source: CNNExpansión (sp)

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