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Amazon to invest $100 million in Mexico, will build warehouses and fulfillment centers

Latin America is an attractive market for e-commerce giants like Amazon with a populace eager to enter the online shopping revolution.
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Amazon plans to invest $100 million to open new warehouse facilities in Mexico. The e-commerce giant will open its first shipping center on the outskirts of Mexico City. Two new fulfillment centers will also come up; one near the northern city of Monterrey and another near the central city of Guadalajara. Both these cites—Monterrey and Guadalajara—are the two biggest metropolitan zones of the country after the capital Mexico City.

The new facilities will create 1,500 new jobs. The total area covered by all three centers add up to 69,000 square meters (742,710 sq ft), Amazon said.

Enrique Alfaro, the governor of Jalisco state where Guadalajara is situated, said the new local warehouse will help small businesses ship their products faster and at cheaper costs.

Amazon in total now runs five fulfillment centers, two support buildings and two classification centers in Mexico, where it launched its marketplace in 2015.

Amazon has increased its hub lockers too in the country. These are collection centers scattered across locations, which can be operated with a code system to collect all deliveries. These are convenient as one can pick up an order without having to wait for the courier service at home, at a time that is convenient for the buyer.

Amazon is planning to expand its reach in Latin America and has also increased its fulfillment centers in Brazil. It recently opened its fifth and biggest fulfillment center in the country, with 100,000 square meters (1,076,391 sq ft).

In Mexico and Brazil, Amazon is competing with local entities to get a foothold amongst the native customers.

Mexico in recent years has become a promising e-commerce market with an increasing interest in online platforms due to the confidence, security, and online convenience that the consumers are discovering.

International companies like Amazon, Mercado Libre, and Walmart are some of the fastest-growing in the country. But what do homegrown e-commerce sites have to say about the advent of international competition?

Amazon fulfillment center Mexico

AMZL Associate in Mask with Hand Scanner (Image: Amazon)

Alejandro Colin, vice president of Sales Enablement at Vtex, told NotiPress: "We think that more than competing is to add efforts to increase the participation of online commerce in the country. Other countries smaller than Mexico have had a more accelerated development in this sector. Amazon's impulse in its investments encourages the rest of its competitors to redouble their efforts in basic systems such as SEO, quality content, aggregated services, faster deliveries, etc. and not just competitive prices."

According to a Worldpay report on e-commerce and its prospects in Mexico, it revealed that the sector recorded profits of $18 billion dollars in 2018 with a projection of $28 billion dollars by 2022.

In the 2019 Prime day sales, Mexico logged in record sales with the purchase of 175 million products.

Colin of Vtex said, ”Generally markets mature because the customer matures and demands other services or because the competition improves and you cannot be left behind. We believe that in Mexico the two points converge. Amazon's actions push large and small competitors to join the digital era and improve all services, in addition to opening more possibilities for different brands to reach the consumer more assertively through the digital channel, in general, is a virtuous circle where the winner should be the end consumer."

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