Business

Brazilian retail giants are feeling the pressure of Amazon Prime's arrival

Stocks of the major retailers have closed with losses at the date of Amazon's new launch in the country

Brazilian retail giants are feeling the pressure of Amazon Prime's arrival

The arrival of Amazon Prime in Brazil, a subscription package that includes streaming services and free shipping on purchases, didn’t just catch the attention of consumers: the financial market also felt the shift taking place yesterday, on the launch of the service in the country. The stocks of the primary Brazilian retailers suffered significant losses.

Magazine Luiza, Lojas Americanas, B2W, and Via Varejo together lost BRL 4.75 billion–ending the day at the Brazilian Stock Exchange (B3) with a valuation of BRL 103.7 billion. The previous day, the retail giants were valued together at BRL 108.45 billion. In percentage terms, the most impacted company was Magazine Luiza, with losses of 4.97%. B2W placed second, with losses of 4.83%, followed by Via Varejo and Lojas Americanas–with the corresponding losses of 3.28% and 3.2%.

the most impacted company was Magazine Luiza, with losses of 4.97%. B2W placed second, with losses of 4.83%, followed by Via Varejo and Lojas Americanas–with the corresponding losses of 3.28% and 3.2%.

Amazon’s new service in Brazil explains the uncertainties of the local market: linking streaming products with free shipping in up to 48 hours, the American giant is betting on a strong loyalty model that is already consolidated globally: Amazon Prime has more than 100 million clients in the world, and in the United States, the service corresponds to half of all e-commerce sales.

ALSO READ: Amazon Prime will offer free shipping in up to 48 hours

Price is another factor that intensifies the competition with large Brazilian retailers: Amazon Prime‘s package in Brazil arrives with the price tag of BRL 9.90 for the monthly plan and BRL 89.90 for the annual subscription.

To face Amazon‘s aggressive strategy, the Goldman Sachs bank said, in a report, that Brazilian competitors will have to invest, showing flexibility. According to information from analysts in the institution, published by Brazilian newspaper Estadão, “even if the company doesn’t reveal its revenues in the country, we anticipate that the website is among the top ten of the e-commerce market in Brazil.”