Amazon Makes Foray into MercadoLibre’s Home Ground, Argentina

Analysts say the Buenos Aires office will focus on winning new clients for cloud computing services rather than expanding e-retail.

Amazon

American online retailing giant Amazon has planted roots in Buenos Aires in an apparent bid to grab a slice of the regional e-commerce market dominated by Argentina’s most acclaimed e-retailer MercadoLibre.

However, analysts say, the Buenos Aires office will focus on winning new clients for cloud computing services rather than expanding its e-retail footprint.

Amazon Web Services (AWS) handles data and computing for large enterprises, including governments, in the cloud. In Latin America, the retail giant has offices in Brazil, Chile, Colombia, and Mexico.

While Amazon’s IT services and retail arms operate as separate business entities, the company has been known to house both teams under one roof as soon as retail presence is justified. In Mexico, for example, the company initially focused on web services, before launching its retail operations from the same offices a year later.

Despite the local influence of MercadoLibre, known as the eBay of Latin America, the Argentinean government has made repeated attempts to court investment from Amazon — reports say ministers from the federal government met Amazon executives several times.

MercadoLibre’s new potential rival is also trying to win the hearts and minds of Argentinians — Amazon Prime has recently agreed to publicize a drama that will examine the life of Diego Maradona, Argentina’s soccer superstar, when he was at the peak of his career and helped the country win the World Cup.

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Considering local news reports, the US company will soon build out a data center in Argentina, laying the foundation stone for expanding its web service. Adding more data centers close to clients will reduce latency and help Amazon handle an influx of customers that are looking to move their operations to the cloud.

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