Amazon Prime launches in Mexico as consumer confidence picks up

Good timing.

E-commerce giant Amazon has launched its Amazon Prime service south of the border a day after official data pointed to a pickup in consumer confidence.

“Amazon Prime now in Mexico. Free shipping plus Prime Video. Try your free trial,” the company exhorted in a tweet, writes Jude Webber in Mexico City.

The service will cost 449 pesos ($23) for the first year, rising to 899 a year after that, giving shoppers in Mexico City, Querétaro, Puebla and Guadalajara one-day delivery.

Amazon launched its Prime Video service in Mexico last December and is clearly hoping the launch of Prime delivery will help attract viewers to its service in the fast-growing market as it goes head-to-head with Netflix, which has more than two-thirds of the market. According to Statista, an online statistics source, Netflix has some 1.2m subscribers in Mexico. Amazon Prime shows include Mozart in the Jungle, starring Mexican actor Gael García Bernal.

Prime’s launch comes as the Mexican peso has recovered some ground against the dollar after being walloped by Donald Trump’s election victory. Uncertainty over the US president’s trade plans with Mexico has undermined investor confidence, and consumer confidence has also taken a knock since a huge gasoline price increase at the start of the year.

But as Alberto Ramos at Goldman Sachs noted this week: “Consumer confidence posted a broad based 11.1% month-on-month seasonally-adjusted increase in February, positive but not enough to offset the very large 16.1% mom sa decline recorded in January. That is, despite the positive February print, consumer confidence is still down 6.7% from December, and 12.3% from mid-2016.”

He added: “Overall, despite the February rebound, consumer (14.7% year-on-year) and business (-10.5% yoy) confidence has deteriorated visibly and is a source of concern for the outlook for real activity as it turns consumers/households more defensive (increases precautionary savings and reduces the appetite to buy durable goods) and through it undermines the hitherto strong buoyancy of private consumption.”