Pandemic e-commerce boom drives market concentration
There is a silent consolidation underway in Brazilian online retail. It’s not as visible as the one occurring in brick-and-mortar stores, and it advances in parallel to the recent boom in sales on websites and apps.The digital boom driven by the pandemic expanded the number of online marketplaces in the country. Despite the fact that online marketplaces boost small retailers, large, better structured groups grow faster and lead the pack.The annual report "300 Maiores Empresas do Varejo Brasileiro" (300 Largest Companies in Brazilian Retail), focused on the performance and prospects for the sector, shows that the five largest online retailers combined reached R$51.8 billion in direct sales of products from their own inventories.They account for 55.6% of e-commerce revenue, which totaled R$93 billion in 2020, according to pollster Ebit | Nielsen. The share was lower, at 45.2% in 2019. That’s R$23.8 billion more in sales for the five companies in one year.Magazine Luiza is the leader, followed by Via Varejo, Lojas Americanas, Global Fashion Group (owner of Dafiti) and U.S.-based Amazon - the latter’s sales were estimated by consultants.The figure represents 6.5% of the sales of the top 300 companies in brick-and-mortar and online retail, compared with 3.9% in the previous edition of the survey. The rise is partly explained by temporary store closures due to the health crisis.Considering their online marketplaces, which include sales of small and medium retailers and those of the companies themselves, the five largest retailers totaled R$123.9 billion in transactions through their platforms in 2020, up 81% from 2019. This pace of expansion is faster than the e-commerce average. Mercado Livre is the leader of the segment, followed by Magazine Luiza, Americanas, Via and Carrefour."The advance of online marketplaces because of the pandemic caused an invasion of small firms in this segment. Everybody won. The digitalization of our retail has been happening, but the strength of the leading brands makes a difference in a crisis, when fast delivery and competitive prices are key," said Alberto Serrentino, founding partner of Varese Retail.Varese, along with BTR Educação e Consultoria and University of São Paulo’s Center for Retail Studies and Research, support the ranking put together annually by the Brazilian Retail and Consumption Society (SBVC), one of the most detailed studies of the sector. The data was obtained directly from the chains, in press...
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