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SAO PAULO (Reuters) - Amazon.com Inc is struggling to ramp up its operations in Brazil, a promising market that so far has proven difficult for the world’s largest online retailer to crack, according to nearly twenty people with knowledge of the situation.
Challenges include the nation’s tangled tax system, complicated logistics and testy relations with some prominent vendors, who say the Seattle behemoth has shown little flexibility in negotiating even though it is still a minor e-commerce player in Brazil.
Several well-known firms here, including Brazilian fashion label AMARO and footwear and accessory retailer Arezzo Industria e Comercio SA, have declined Amazon’s offers to sell their goods on its platforms, according to seven of the people. Some big electronics manufacturers - such as Lenovo Group Ltd, one of the world’s largest computer makers - have inked contracts only in the last few weeks after months of intense wrangling.
No one is counting Amazon out. The company continues to push ahead with plans to construct its own in-house fulfillment and delivery network in Brazil, tasks that currently are handled by the vendors whose merchandise it sells on its site.
But that initiative is taking longer than expected and, when finally unveiled, is likely to be modest in scope compared to its operations in other emerging markets such as India and Mexico, according to interviews with current and former employees, manufacturers, consultants and others with knowledge of the effort.
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