A Casas Bahia will begin to sell products no Free Market from November as part of a long-term commercial partnership, the companies announced this Thursday (23).
The partnership is expected to increase Mercado Livre’s market share in segments such as electronics and household appliances in Brazil, while boosting Casas Bahia’s sales, company executives told Reuters.
Financial details and sales projections of the partnership were not disclosed.
“I see a very big synergy in this movement,” said the senior vice-president of Mercado Livre in Brazil, Fernando Yunes. “Casas Bahia has leadership and enormous scale in household appliances, electronics and furniture.”
The idea is for Casas Bahia to do most of the order logistics – although this will depend on the product and location -, as the company has greater experience in transporting large products, such as TVs and refrigerators, than Mercado Livre, the executives said.
O, but it still faces difficulties in repeating its formula in segments such as electronics and household appliances.
Mercado Livre’s market share in Brazil in heavy household appliances, such as refrigerators and stoves, is about a quarter of the company’s average, Yunes said.
For Casas Bahia, the partnership could mean an increase in sales, as the retailer seeks to complete an operational and debt restructuring process that began in 2023.
“It is a partnership that marks the entry into a sales channel that has grown a lot, with very strong growth projections for the coming years”, said the president of Casas Bahia, Renato Franklin. “We were not yet present in generalist marketplaces.”
Companies in the e-commerce segment, including Mercado Livre, Shopee, from the Singapore Sea group and Amazon, have intensified the competitive environment in the sector in the country in recent months by increasing logistics capacity and carrying out consistent promotional actions.
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The partnership between Mercado Livre and Casas Bahia begins across the country in November, the month of Black Friday, involving products such as household appliances, electronics and furniture, and should reach 100% of Casas Bahia’s products next year, said Yunes.
Mercado Livre, known mainly for its e-commerce platform where third parties sell products (marketplace), also has a secondary business selling directly to consumers, which includes electronics and household appliances.
Casas Bahia, on the other hand, has the opposite model, with its main business being direct sales to consumers, although the company also has its own marketplace.
Franklin and Yunes said that both Mercado Livre’s direct sales operations and Casas Bahia’s marketplace will continue to exist.
Asked if the partnership could evolve in the future, Yunes only said that the focus will be on getting the most out of what is being announced. “Total focus on synergies to make businesses accelerate and prosper as much as possible.”
