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In Brazil, Amazon Starts Selling Kindles Direct, Books are Next

In Digital by Carlo Carrenho

After 13 months of using partners to sell Kindles in Brazil, Amazon is now offering direct sales. If they can do that, books are not likely far behind.
Amazon promises 1-3 day deliveries of Kindles to customers in big cities, and more than a week to more remote areas.

Amazon promises 1-3 day deliveries of Kindles to customers in big cities, and more than a week to more remote areas.

By Carlo Carrenho, PublishNews Brazil

If you were to characterize Amazon’s relationship to the Brazilian market as of last week, you might say it was like virtual sex, since one extremely important element for good e-commerce — and for good sex — was missing: the physical aspect. After all, Amazon’s Brazilian store still only offered eBooks and digital apps a year after its launch in December 2012. It was a flirtation that never quite got physical enough to satisfy the fully aroused Brazilian consumer.

A two-page feature published this month by VEJA – the largest Brazilian weekly — criticized the company for a slow start. In the article, headlined “Rocks on the Road,”  journalist Thiago Prado evaluated Amazon’s first year of operations, noting that Amazon faced “problem after problem” and “finished its first year in low gear.” He blamed the Brazilian bureaucracy, its high taxes and high costs, as the main culprits for Amazon’s struggles.

Amazon is claiming 40% ebook marketshare in Brazil.

Amazon is claiming 40% ebook marketshare in Brazil.

And there is some truth in it. To cite just one important example, Kindle devices were only sold by Amazon’s partners in Brazil, both online and brick-and-mortar stores. The partnerships even allowed pop up kiosks in popular malls to carry the Kindle brand, marking the first Amazonian attempt to a brick-and-mortar venture in the world.

But just five days after the VEJA expose hit newsstands, Amazon made its move, announcing it would start to sell and ship Kindle devices and accessories directly, using its own distribution and logistics solution.

Amazon Claims 40% Share of Ebook Market

Though 2013 was all digital year for Amazon in Brazil, performance was far from a let-down. The same VEJA article pointed out some interesting Amazon numbers. According to Prado, some 60,000 Kindle devices were sold in Brazil, and the company took a 40% market share for ebooks. Prado doesn’t reveal his source for the data and it is not clear if the number of Kindles include those brought by Brazilian visitors to the US, usually smuggled in the middle of their dirty laundry to stymie customs officers at the airport. Also, the estimate of Amazon’s market share seems highly optimistic — the general industry consensus is that it is probably closer to 30% — though it is yet unknown just how successful Amazon was at selling Kindles through the all important Christmas period.

Still, the fact remains that as of today Amazon is the number one ebookseller in Brazil. It’s quite an accomplishment for a company that started selling ebooks in December 2012, lagging behind several other competitors.

Another interesting fact mentioned by Prado is Amazon’s use of a lobbyist to advocate for legislation that would exempt the dedicated Kindle from taxes, much in the way books are classified.

A New Game for Amazon in Brazil

For the book industry, the entrance of Jeff Bezos’ company into physical e-commerce is a milestone. As they were heretofore limited merely to digital goods, the Seattle’s giant was seen as little more  more than a São Paulo’s pigmy. In 2013, ebooks books accounted for just 2-3% of the Brazilian trade book market; even with a share of 30% of ebooks, Amazon’s overall share of the Brazilian book trade was below 1% — a situation which gave it little power to negotiation power with publishers. That, coupled with resistance from local brick-and-mortar competitors, obliged it to offer concessions when negotiating its digital contracts. In some cases, the company even accepted steep limitations for customer discounts.

But it is a new game now. It is known Amazon has been negotiating printed book distribution contracts with the largest Brazilian publishers for several months, even though they did not have a logistics operation in place. Now, their logistics – it is not clear if it is outsourced or not — is alive and kicking. And it is well known that if you can ship a Kindle, you can ship anything, and there is no doubt that printed books are coming soon…probably very soon. Once Amazon starts selling and shipping print books, it will have further leverage to negotiation and will be all the more competitive.

One should also note that Amazon is already one the largest booksellers of foreign language print books in Brazil, and possibly the largest, with the thousands of English titles ordered every month from Amazon in the US by Brazilian customers. With this customer base alone, Amazon already has a solid launch pad for selling print books in Brazil.

Naturally, Amazon is still building up its distribution. It may not be up to American standards of next day delivery, but it is pretty solid for Brazil: shipping on Kindles delivered to big cities, such as São Paulo and Rio de Janeiro, will take one to three business days. Readers in more remote cities, such as Macapá in northern Brazil, which is on the Equator, will have to wait eight to 11 days. Brazilian publishing professionals like to joke that, given the lack of infrastructure, only Bezos’ futuristic octocopter drones will be able to make deliveries in Brazil as fast as in the US.

However, other customer friendly services Amazon offers, such as one-click purchasing and the ability to save payment information, are already an improvement over many other Brazilian e-commerce competitors.

Yes, it took 13 months for Amazon to get physical with Brazil and take it to first base. But mark my words: it won’t be long before they take it to the next level and fully consummate the relationship with the tall, tan, dark and lovely Brazilian consumer by delivering physical books.

About the Author

Carlo Carrenho

Carlo Carrenho is a Brazilian publishing consultant and journalist. In 2001, he founded PublishNews, a daily electronic newsletter in Portuguese that covers the Brazilian publishing market. He’s also worked for several Brazilian publishing houses, including Thomas Nelson Brasil, which he launched in 2007.