Amazon's emerging presence in Peruvian e-commerce

The Peruvian e-commerce market may be facing significant changes as Amazon has expressed interest in expanding into the country. Recent announcements by Peru's Economy and Finance Minister about talks with US companies such as Amazon raise questions and suggest a potential shift in the country's retail sector.

Amazon: A giant without a physical presence
Despite the fact that Amazon does not yet have any physical operations in Peru - such as fleets and warehouses - the company already plays a crucial role in Peruvians' online purchases. The numbers speak for themselves: in 2019, Peruvians’ purchases on Amazon amounted to an impressive S/336 million. Amazon was also the sixth most visited website in Peru in 2020. This shows that Amazon already has a significant market share without having a local presence.

Helmut Cáceda, president of the Cámara Peruana de Comercio Electrónico (Capece), emphasizes that Amazon has already gained significant market share through its foreign products, which are difficult to obtain locally. This illustrates that Amazon is already a major player in Peruvian e-commerce, even without physical facilities in the country.

The strategy behind free shipping
Amazon's recent announcement that it will offer free delivery to Peru raises questions and leaves room for speculation about the company's expansion plans in South America. Samir Kumar, Vice President of Exports and Expansion at Amazon, emphasizes that the company is committed to improving customer experiences worldwide. But what role does Peru play in this global expansion strategy?

Daniel Chicoma, an e-commerce expert at ESAN, believes that the introduction of free deliveries is a step to gain a foothold in South America - the only market where Amazon has not yet achieved dominance, unlike Mercado Libre , which has already achieved partial dominance in Latin America.

Amazon vs. Mercado Libre: A competition in logistics
The competition between Amazon and Mercado Libre could unfold on different levels. Chicoma emphasizes that Amazon is not only a major e-commerce player, but also plays a key role in the logistics system, especially in the area of ​​warehousing. Amazon already has a presence in Colombia and Brazil, while Mercado Libre is not yet fully prepared for cross-border trade.

Mercado Libre has posted an impressive profit margin so far, but Chicoma questions whether the company can keep up with the launch of Amazon warehouses in an evolving market. Amazon could have a competitive advantage through its integrated operating structure, especially when it comes to cross-border commerce.

Infrastructure and market preparation: Obstacles for Amazon in Peru
Despite Amazon's interest in expanding in Peru, there are concerns about the country's current infrastructure and market preparation. Helmut Cáceda, president of Capece, sees Chile and Colombia better positioned to welcome Amazon because these countries have better infrastructure and transport connections.

A key point is that Peru currently only has a distribution center in Lima. This poses a challenge for the widespread expansion of e-commerce in the country. Cáceda emphasizes that many improvements are still needed to unlock the potential of e-commerce in Peru.

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Potential benefits for Amazon: Chancay and warehouse expansion
Despite these obstacles, there are a few factors that could lead Amazon to consider Peru. Chicoma, ESAN's e-commerce expert, highlights the possibility that Amazon could buy existing warehouses in the south of Lima, as they continue to increase in supply and already represent 65% of the total offers.

Another crucial factor is the port of Chancay, which could facilitate the redistribution of products. Chicoma sees this as an opportunity for the development of multimodal transport in Peru. A company like Amazon, which sells online on a global scale, relies on various modes of transportation, from planes to ships to trucks and motorcycles.

Future outlook: Amazon in Peru?
The prospect of Amazon entering the Peruvian market remains exciting. Peruvian Economy and Finance Minister Alex Contreras has stated that companies such as Walmart and Amazon have expressed interest in expanding in Peru. Nevertheless, some experts believe that Amazon's expansion in Peru in the short or medium term is unlikely, as the necessary infrastructure for e-commerce is not yet sufficiently developed.

It remains to be seen how the situation will develop and whether Amazon will actually enter the Peruvian market in the near future. The expansion of storage capacity and the development of the port of Chancay could be decisive factors that encourage Amazon to gain a foothold in Peru. Meanwhile, the Peruvian e-commerce sector remains excited about the possible changes that could come with the potential arrival of Amazon.

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