Diego Rodríguez Paez
Director of Logistics and Industry Practice
AMI
Latin America is one of the fastest-growing digital markets in the world, yet Amazon has never managed to dominate the region in the way it has in the United States or Europe. Despite its robust presence in Brazil and Mexico, launching Prime memberships, and investing in logistics infrastructure, Amazon still lags far behind Mercado Libre — the homegrown e-commerce powerhouse in the rest of Latin America.
The challenges are familiar: fragmented infrastructure, costly last-mile logistics, and entrenched local competitors. To catch up, Amazon now appears to be rewriting its playbook. Instead of going it alone, it is betting on a regional partner that already knows the terrain outside of the major markets: Rappi.
With operations across nine countries, Rappi has become a household name for millions of consumers, evolving from a food delivery app into a super app that handles groceries, courier services, payments, and even banking. For Amazon, investing in Rappi is not just about buying equity. It’s about getting speed, reach, and local knowledge.
This move could accelerate Amazon’s push into Latin America by leveraging Rappi’s extensive courier network. But as with any ambitious bet, the road ahead is paved with both opportunities and risks.
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Amazon’s Strategic Expansion in Latin America
Amazon’s history in Latin America is a story of ambition meeting resistance. The company entered Brazil in 2012 and Mexico in 2015, gradually expanding its offerings from books and electronics to a full catalog. Prime membership followed, bringing streaming and faster delivery promises. Yet progress has been slow.
Unlike the U.S. and Europe, where Amazon established dominance through massive investments in warehouses, air fleets, and a proprietary last-mile network, Latin America posed unique challenges. Logistics costs were high, consumer trust in online shopping lagged, and Mercado Libre had already built a loyal base with a strong payments ecosystem and fast delivery options through Mercado Envios.
Enter Rappi. Founded in Bogotá in 2015, Rappi quickly became one of the region’s most valuable startups. Its secret weapon? A hyper-local courier network capable of navigating congested streets and informal addresses. Rappi’s riders aren’t just delivery agents — they are trusted intermediaries who can fetch groceries, deliver prescriptions, or send packages across town.
For Amazon, aligning with Rappi represents a shortcut into relevance. Instead of replicating a last-mile network from scratch — a process that would take years and billions of dollars — Amazon could access Rappi’s existing courier infrastructure.
This partnership also brings strategic synergies:
- Prime + Rappi Prime: Bundling memberships could deepen customer loyalty while lowering churn.
- Catalog expansion: Amazon’s wide assortment could be offered through Rappi’s app, reaching consumers who already use it daily.
- Urban scale: Rappi’s penetration in key metropolitan areas outside of the big 2 (Brazil and Mexico) presents Amazon with an opportunity to accelerate same-day delivery in the rest of the region.
The message is clear: Amazon is ready to explore the rest of Latin America, and it wants to leapfrog into leadership.
Logistics and Last-Mile Transformation
The biggest bottleneck in Latin American e-commerce is not demand. Consumers across the region are embracing digital shopping at double-digit growth rates. The bottleneck lies in getting products into their hands quickly and reliably.
The Last-Mile Problem
Last-mile delivery in Latin America is plagued by:
- Urban congestion: Gridlocked traffic in cities like Bogota, Lima, Quito, or San Jose can make predictable delivery times a challenge.
- Informal addresses: Many neighborhoods lack standardized addresses, requiring couriers to rely on local knowledge or direct phone calls.
- High costs: Last-mile expenses can account for more than 50% of total logistics costs, making free or low-cost delivery difficult to sustain.
Why Rappi Changes the Equation
Rappi has already developed an ecosystem designed to overcome these obstacles:
- Tens of thousands of couriers familiar with the streets they cover.
- A gig-based model that flexes with demand surges.
- A presence in tier-two and tier-three cities, which larger logistics players often overlook, will fuel the next wave of e-commerce growth over the next decade.
Amazon Marketplace could access Rappi’s delivery network, creating several scenarios:
- Amazon inventory delivered via Rappi couriers — enabling same-day or even two-hour deliveries in select markets.
- Rappi app hosting an Amazon storefront — exposing Amazon’s vast catalog to millions of existing Rappi users.
- Prime bundle with Rappi Prime — offering consumers a single subscription for free delivery across groceries, electronics, and entertainment.
For consumers, this could mean a shift from waiting five days for an Amazon online order to receiving it within hours. For Amazon, it could mean closing the service gap with Mercado Libre and even leapfrogging it in speed.
The competitive implications are profound. Mercado Libre has invested heavily in Mercado Envios, including warehouses, cross-docking stations, and an air cargo fleet. However, Amazon, combined with Rappi, could counterbalance that edge by leveraging a global catalog scale with local delivery agility outside of the two major markets in Latin America.
If this investment works, it may not stop at Latin America. Amazon could replicate this model in other emerging markets with fragmented infrastructure, such as those in Southeast Asia and Africa. The Amazon-Rappi experiment could become a blueprint for global expansion in places where building a proprietary logistics network is simply too slow or too costly.
Risks and Challenges: The Logistics Test
While the potential is enormous, execution will determine whether this investment becomes a success story or a cautionary tale. And the biggest risks lie in logistics and transportation — the very areas Amazon hopes Rappi can solve.
1. Courier Network Strain
Rappi’s couriers are optimized for food and small parcel deliveries, not large, bulky items. This will limit the categories where Amazon can expand its blueprint.
2. Service Quality and Reliability
Amazon has built its reputation on reliability: packages arrive on time, in good condition, with clear tracking. Rappi’s model, while agile, has faced complaints about inconsistent service quality, ranging from late deliveries to gaps in customer support. Aligning Rappi’s standards with Amazon’s rigorous expectations could be a significant challenge.
3. Infrastructure Bottlenecks
Even with Rappi’s local expertise, broader infrastructure gaps remain:
- Limited warehousing capacity in secondary cities.
- Overcrowded ports and customs delays affect upstream supply chains.
- Inadequate road and transport networks connecting urban hubs with rural areas.
Amazon can improve these aspects over time, but in the short run, it risks customer frustration if expectations rise faster than capabilities.
4. Gig Economy and Labor Dynamics
The model depends on tens of thousands of gig couriers. Governments in Latin America are increasingly scrutinizing gig work, debating new rules on worker protections, minimum wages, and benefits. If stricter regulations are introduced, the cost of operating such an extensive courier network could rise significantly, affecting the economics of fast delivery.
5. Responding to Temu’s Disruption
Adding to the urgency is the meteoric rise of Temu, the Chinese ultra-low-cost platform that has stormed into Latin America with aggressive marketing and free-shipping campaigns. Temu’s appeal lies in its unbeatable prices and direct-from-China model, but its Achilles’ heel is logistics: deliveries often take weeks. By linking up with Rappi, Amazon can position itself as the faster, more reliable alternative, combining local last-mile agility with global product depth. In a market where Temu’s bargains increasingly tempt consumers, Amazon’s ability to deliver products the same day through Rappi could prove decisive in winning loyalty and countering this new wave of competition.
Next Steps: The Role of Market Intelligence
As Amazon and Rappi chart this bold new path, other e-commerce players — whether global giants or regional challengers — will need to reassess their strategies. Latin America is a market of immense opportunity but also one of complex logistics, fragmented consumer behavior, and evolving regulation.
This is where market intelligence becomes indispensable. By mapping competitive landscapes, identifying high-growth consumer segments, evaluating last-mile partners, and tracking regulatory risks, companies can move beyond trial and error and make data-driven decisions. In practice, this could mean understanding which cities are ready for same-day delivery, which customer segments are most sensitive to subscription bundles, or which logistics corridors are bottlenecks. For companies aiming to penetrate or expand in Latin America, investing in market intelligence is not just about avoiding mistakes — it’s about gaining an edge in one of the world’s most dynamic digital economies.
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