Magalu Wants to Bring More Products from the United States

The Brazilian retailer intends to increase the volume of higher value-added products from the United States

Magazine Luiza is strengthening its partnership with the Uruguayan startup nocnoc to bring more products from the United States. Nocnoc connects global sellers to marketplaces and has had an agreement with the Brazilian retailer for over a year and a half.

With the new Remessa Conforme regulation set to take effect on August 1st, the retailer aims to accelerate the import of products from other countries.

The new guidelines, sanctioned last month by President Luiz Inácio Lula da Silva, clarify the rules in the “blusinhas tax” controversy. Purchases up to $50 will be taxed at 20%. Products valued between $50.01 and $3,000 will face a 60% tax, with a fixed deduction of $20 from the total tax amount.

The strengthened agreement aims to expand the offering of higher value-added products from the United States. “The main goal is to expand our assortment, bringing brands that are not yet present in Brazil and that most Brazilians cannot afford to travel to purchase abroad,” says Felipe Cohen, executive director of marketplace at Magazine Luiza.

The New Game

In this strategy, the partnership complements the recently announced agreement with AliExpress, where the Brazilian retailer sells products from the Chinese network and vice versa. There, items have a lower average ticket and demand is driven more by impulse purchases.

“For these products from the United States, we are talking about something between R$300 and R$2,000,” Cohen states. The main categories include electronics such as headphones and speakers, toys like plushies and dolls, as well as home and fashion items.

The two partnerships are part of the Brazilian retailer’s strategy to enhance results through cross-border commerce, which is still underrepresented in terms of business generation.

“With the law sanctioned, we decided to focus much more on this. We want, in a short period of time, to make these two operations very relevant in our marketplace, which they currently are not,” Cohen says.

Last week, the retailer announced the addition of Raul Jacob, the director responsible for structuring the marketplace operation of the Chinese company Shein in Brazil. “This shows the weight we are putting on this matter,” says the executive.

In 2023, marketplace sales reached R$18 billion, a 17% increase compared to 2022. The channel is the second largest in transactions and accounted for about 30% of the retailer’s total sales. In the first quarter of this year, the share rose to over 40%, with R$5 billion in sales.

What is nocnoc’s Role

The Uruguayan startup will be responsible for all logistical and customs operations of the goods, ensuring faster delivery times and a better experience. For the job, nocnoc received approval from the Federal Revenue Service to operate Remessa Conforme for Magalu.

Founded in 2018 in Montevideo, Nocnoc functions as a ‘concierge’ for digital sellers of goods from around the world. The focus is on helping suppliers enter emerging markets, such as Brazil. Or, as in Magalu’s case, attracting new sellers.

The startup’s model aims to offer services that address the complexities of commercializing products in Latin American countries, related to customs fees and logistical challenges.

With operations in countries like Mexico, Colombia, and Chile, nocnoc considers Brazil its main market, representing 60% of the entire business. In addition to agreements with Magalu, the startup offers its services to platforms such as Mercado Livre and Amazon.

“We are optimistic about the future because e-commerce companies in Brazil will grow more in cross-border trade because they now have more long-term security, regulated law, and more adequate delivery speed,” says Ilan Bajarlia, co-founder and CEO of nocnoc.

The definitions regarding goods imports are expected to contribute to the startup’s accelerated revenue growth, projected to increase by 2.5 to 3 times compared to the previous year.

Original Article in Portuguese