The partnership between Magazine Luiza () and Americanas () e-commerce, announced last Tuesday (18), brings together two of the most traditional Brazilian retailers in the dispute with the growing influence of international competitors in the sector. The strategy seen as promising for expanding the product offering, improving delivery conditions and reducing logistics costs should show results in the long term.
The fifth and eighth largest marketplaces in Brazil — respectively, according to data from Conversion — Magazine Luiza and Americanas are now being sold on their digital platforms in an unprecedented move in Brazil. The idea, say the companies, is to complement the product mix by taking advantage of categories in which each one is strongest.
The CEO of Conversion, responsible for the E-commerce Sectors in Brazil report, believes that the integration is “a relevant movement for Brazilian e-commerce. “This partnership tends to change the dynamics of the sector, which should intensify the fight for the top positions in the ranking”, he states.
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In the case of Magalu, white goods, audio and video, telephony, mobile and portable devices; and das Americanas, candy store, food, cleaning, personal hygiene, domestic utilities, office.
Behind the union is a broader shift in consumer behavior since the pandemic. “The variety of products that are purchased on e-commerce has increased. Bomboniere, food, were rarer items on this platform. Today acceptance is greater”, highlights the executive director of Peers Consulting + Technology, Admar Corrêa.
For the expert, the partnership can impact the three main elements of competition in online retail: price, delivery time and credibility.
Because they have great bargaining power due to their size, retailers such as Magazine Luiza and Americanas should add new product categories at more competitive prices to their e-commerce sites — there could also be an impact on profit margins. Furthermore, the presence of these companies’ physical stores spread across the country improves the capillarity of delivery points, since the stores themselves function as distribution centers.
“Not only do we have absolutely complementary portfolios, which will benefit the
consumer, how this joint action strengthens our omnichannel operation
by integrating Americanas physical stores into our marketplace”, said Frederico
Trajano, CEO of Magalu, in a note.
Foreign competitors
The battle to increase presence in Brazil — and consequently the speed of delivery to the consumer — is a central point in the growth of major international players in the country, with emphasis on Mercado Livre (), the largest marketplace in Brazil in terms of accesses in the country according to Conversion, and Amazon (), the third largest. Both are at a billion-dollar pace of investment also dedicated to logistics expansion.
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Still in pilot, the recently announced agreement includes products from 50 physical stores in 15 Brazilian capitals of Americanas on the Magazine Luiza digital platform in the modality ship from store — when stores are used as distribution centers –, sent directly from a physical store to the customer. Magalu direct sales products are included in Americanas e-commerce.
The partnership takes advantage of investments already made in physical structure to improve distribution capacity and reduce inventory costs. “The logic used in this case is convenience. Making life easier for the customer and also reducing logistics costs. ship from store would have this objective”, points out the retail professor at Strong Business School, Ulysses Reis.
Reis considers, however, that this strategy carries some costs. THE ship from store adds, for example, the so-called “fair cost”, of that person responsible for issuing invoices and preparing the products in the store. There are also transportation, loading and intermediary expenses associated with the strategy.
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In the midst of a high interest rate scenario, which makes possible consolidation movements through mergers and acquisitions difficult, especially in a sector with tight margins such as retail, partnerships such as those with Magalu and Americanas seem to be becoming a good alternative. In October 2024, Magazine Luiza itself had already announced a partnership with AliExpress, from the Chinese group Alibaba. This year, an agreement allowed appliances, electronics and furniture from the Casas Bahia Group to be sold on Mercado Livre.
“These are lower risk paths. These partnerships are good because they serve as a test. One thing is the thesis of a single store, it’s another to test, see how much the increase in volume and traffic is”, says the executive director of Peers Consulting + Technology, Admar Corrêa. “It’s a race of speed, of who can generate competitive differences faster. Generating organically takes much longer.”
