Amazon expands in Brazil, riding e-commerce boom set off by COVID-19 distancing

SAO PAULO (Reuters) - Amazon AMZN.O said on Monday it had opened three more logistics centers in Brazil to take advantage of the boost the COVID-19 pandemic has given to e-commerce in South America's largest economy.

FILE PHOTO: The logo of Amazon is pictured inside the company's office in Bengaluru, India. Picture taken April 20, 2018. REUTERS/Abhishek N. Chinnappa

The new units are already operating in the states of Minas Gerais and Rio Grande do Sul and the capital city of Brasilia. They increase the number of Amazon logistics centers in Brazil to eight, expanding its reach to all corners of the vast country.

The expansion, which adds 75,000 square meters (807,000 square feet) of distribution space, is Amazon’s biggest since it began operating in Brazil in 2012. It will create 1,500 direct jobs, the company said in a statement.

Alex Szapiro, Amazon’s chief executive in Brazil, said the new centers will allow the company to immediately raise the number of cities where Amazon Prime customers can receive deliveries within two business days to over 500 from 400.

“Brazil is the country with the fastest growth in Amazon Prime subscriptions,” Szapiro told Reuters, referring to the company’s loyalty program, which was launched in Brazil in September last year.

In recent months, thousands of Brazilian businesses have migrated to e-commerce platforms as a result of social distancing measures and lockdown measures.

Despite the gradual easing of the measures, the migration to digital sales has continued.

Last week, MercadoLibre Inc MELI.O, Latin America's e-commerce leader, announced that its net revenue in the region soared nearly 150% in the third quarter, measured in local currencies.

MercadoLibre’s operation in Brazil, which accounts for more than half of its total business, more than doubled.

Other companies in Brazil, including Via Varejo VVAR3.SA, GPA PCAR3.SA and Magazine Luiza MGLU3.SA, are buying up logistics startups to ride the same e-commerce wave.

Reporting by Aluisio Alves, Editing by Rosalba O’Brien