Why is Amazon betting on Rappi to win Latin America’s delivery wars?
With Rappi, Amazon could get access to the speed and fintech rails it needs to scale in the region.
Amazon already runs billion-dollar e-commerce businesses in Brazil and Mexico. But if you thought that meant its Latin America playbook was complete, think again. Instead of doubling down with more warehouses and Prime perks in the region, the company is trying something new by buying a $25 million stake in Rappi — the Colombian-born super app that delivers everything from sushi to savings accounts.
The stake is tiny by Amazon's standards. This is the same company that once dropped $13.7 billion on Whole Foods without blinking. But the number here isn’t the story. What matters is what this money could unlock for Amazon, including a shortcut into last-mile delivery, digital payments, and the daily routines of millions of Latin American consumers.
Why Latin America, and why now?
E-commerce in the U.S. is slowing to a steady jog. Even though online sales still rose 7.5% year-over-year in Q3 2024 (via Digital Commerce 360), that’s a far cry from the double-digit surges we saw during the pandemic. UBS analysts also project that U.S. online retail will grow at about 6% annually through 2028, eventually accounting for 26% of total retail. That's pretty solid, but not the rocket fuel Amazon thrives on.
Latin America, meanwhile, is a different story. The region’s online retail sales are forecast to jump from $122 billion in 2022 to nearly $200 billion by 2026 (via Grand View Research). Smartphone adoption there is near universal, internet penetration is above 80%, and yet fewer than 5% of sellers are international.
That’s wide-open territory. And when you add in Amazon’s own footprint, ten logistics centers and 62 delivery stations in Brazil, $2.5 billion in sales there in 2023, and another $3.5 billion in Mexico, the opportunity becomes even more obvious.
But warehouses can only get Amazon so far. Latin America’s real bottleneck is the “last mile”: weaving through congested cities, unreliable infrastructure, and fragmented payment systems to actually get goods into people’s hands. And that’s exactly where Rappi comes in.
Why Rappi matters
Since launching in 2015, Rappi has expanded into nine countries (e.g., Brazil, Mexico, Colombia, Chile, Peru, Ecuador, etc.) with a promise of ten-minute groceries, pharmacy runs in under an hour, and an all-in-one app that more than 10 million people open daily. For Amazon, which has scale in warehouses but lags in last-mile speed, Rappi is likely the missing puzzle piece.
Its fintech arm, RappiPay, is also just as critical. With credit cards, wallets, and even savings accounts, it mirrors the financial rails that Latin America's delivery giant, MercadoLibre, used to cement its dominance.
Plugging into those rails gives Amazon more than couriers on scooters; it gives it access to how people actually pay in a region where cash still lingers. And since Rappi already runs on AWS, this deal strengthens an existing relationship instead of starting cold.
Emmanuel Oyedeji
Of course, Amazon can’t ignore the incumbent. MercadoLibre has spent two decades building an ecosystem that blends e-commerce, payments (Mercado Pago), and logistics (Mercado Envios). It’s now beyond a marketplace; it’s infrastructure, and it already has a head start across the region with 67 million buyers.
Amazon has tested partnerships before, like with Mexican grocer Jüsto, but those were experiments. Rappi is different. It’s regional, spanning Mexico to Chile, and already lives on the home screens of more than 10 million users. If MercadoLibre built its moat by going wide, Amazon is trying to go deep by embedding itself into a super app that shapes how Latin Americans shop, order, and pay.
The risks ahead
Still, a $25 million investment is more like dipping a toe than diving headfirst. Regulators may scrutinize a tie-up that touches both payments and logistics, two sensitive sectors. And there’s the cultural question: can Amazon’s process-heavy global machine really mesh with Rappi’s scrappy, fast-moving startup DNA?
Timing also complicates things. Rappi is rumored to be preparing an IPO in 2025. Amazon’s warrants could reshape that process, or make it messier.
Overall, though, this move is about Amazon trying to solve the three hardest problems of Latin America’s digital economy: last-mile delivery, digital payments, and marketplace adoption.
Whether this $25 million bet turns into something bigger is an open question. But the signal here is pretty clear: in Latin America, you can’t just build warehouses and hope people come. You have to meet them where they already live, inside super apps like Rappi.
Kelechi Edeh
