SAO PAULO (Reuters) -E-commerce firm MercadoLibre will start to sell Brazilian retailer Casas Bahia’s products on its platform in November under a new long-term commercial partnership, the companies said on Thursday.
The move is expected to increase MercadoLibre’s share in its main market Brazil on segments such as electronics and household appliances, Casas Bahia’s core business, by also boosting sales of the retailer, executives from both firms told Reuters.
The companies did not disclose financial terms or sales projections.
Uruguay-headquartered MercadoLibre operates an e-commerce platform for third-parties to sell their products, and has a secondary business where it directly sells to consumers, while Casas Bahia is the opposite.
“I see a huge synergy in the move,” MercadoLibre’s e-commerce head for Brazil Fernando Yunes said. “Casas Bahia has an enormous leadership and scale in home appliances, electronics and furniture.”
Casas Bahia will manage most shipping logistics, given its greater expertise than MercadoLibre in handling large products such as TVs and refrigerators, the executives said.
MercadoLibre’s e-commerce platform helped turn it into Latin America’s most valuable firm by market cap, but the company has struggled to repeat its formula with electronics and home appliances.
MercadoLibre’s market share in large home appliances, such as ovens and refrigerators, in Brazil is at about a quarter of its average, Yunes said.
For Casas Bahia, an over 70-year-old retailer with more than 1,000 stores in Brazil, the partnership could mean a sales boost as it seeks to complete a debt and operational restructuring process started in 2023.
“It’s a partnership that marks our entry into a channel that has been growing significantly and is projected to grow well into the coming years,” Casas Bahia Chief Executive Officer Renato Franklin said, referring to e-commerce platforms that sell third-party products.
Players of Brazil’s e-commerce segment, including MercadoLibre, Sea’s Shopee and Amazon, tightened the competitive environment in recent months by expanding free-shipping policies and doing consistent promotional actions.
Last year, Brazilian retailer and e-commerce firm Magazine Luiza and Chinese e-commerce platform AliExpress launched a sales partnership allowing the two companies to sell products on each other’s platform.
(Reporting by Andre Romani; Editing by Stephen Coates)
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