By Mary Carroll, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Internet giant Amazon.com is planning to open an operation in Brazil by October of this year, as reported by Reuters. For the world’s largest online retailer, heavy taxation and infrastructural complications have been a major deterrent from launching a division in the country to date.
However, Amazon has decided to enter the market with only digitally-based products, thus, helping to avoid some of the complications. The company plans to offer digital books in Portuguese, made available for Kindle e-book readers.
The hundred percent digital strategy will permit the retailer to minimize costs in the country that “has notorious problems of infrastructure and a tax system complex and costly,” the publishing agency said Friday.
The Brazilian e-commerce market is estimated to be US$10.5 billion, and with a growing middle class the consumer base is predicted to grow by 25 percent this year.
There is anticipation that the Amazon Kindle will be sold at the subsidized price of around R$500, in order to acquire a market share as quickly as possible. That will make it three times the cost of a Kindle in the United States, yet remaining less expensive than rival products in Brazil.
Ludovino Lopes, the head of the Brazilian online trade association camara-e.net, says the key to their success will be in Amazon’s ability to adapt to the Brazilian market. “They must tropicalize their business model in order to meet the challenges” he advised.
Reports indicate that Amazon have signed up thirty publishers in Brazil already, and that they are looking to make 10,000 e-books available before the Christmas sales.
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