Webinar: Selling Online in Brazil for Black Friday

Join Maurici from Magalu, along with Maria from nocnoc, to explore Magalu Marketplace, one of Brazil’s largest online marketplaces. Learn about the exciting opportunities that cross-border selling on Magalu Marketplace, during the peak season, can offer to your business.

Webinar Transcription:

Introduction

Vincenzo:

Welcome to this webinar, where we’re hosting a collaboration between nocnoc, Magalu, and Ecomcy. I will begin by introducing myself as the host of the webinar. My name is Vincenzo Toscano. I’m the founder and CEO of Ecomcy, a full-service Amazon and Walmart brand management agency.

Today, we’ll be discussing how to sell online in Brazil for Black Friday. As you know, Black Friday is a crucial season, particularly for e-commerce. We’ll kick off the presentation with Maurici Jr. from Magalu. He will delve into fascinating topics, including how to start selling on Brazilian marketplaces just in time for Black Friday. Additionally, he’ll talk about what the Magalu marketplace is and why you should consider selling there. We’ll also touch on interesting trends, like forecasts and the top-selling products for Black Friday in 2020.

Following that, we’ll hear from Maria Cecilia from nocnoc. She will discuss the significant potential that nocnoc offers to e-commerce sellers, particularly when it comes to entering the Latin American market. We understand that Latin America can be a challenging region to break into, especially if you’re coming from overseas, and nocnoc is an ideal partner for that.

Magalu Introduction

Maurici: 

It’s a pleasure for me to be here, to discuss how you can sell on the Magalu marketplace. We are a 100% Brazilian company that originated in the heart of Sao Paulo. Today, Magalu takes pride in democratizing what used to be a privilege for a select few. We have grown to become one of Brazil’s largest retailers. Our product range is extensive, serving Brazilians from all walks of life. Notably, we’re home to the world’s most influential digital personality, Lu. To put this into perspective, Lu boasts a larger following on her social media platforms than even Barbie. Magalu operates on an omni-channel model, with a presence in over 1,300 physical stores spanning Brazilian cities. Furthermore, our marketplace is now utilized by an impressive number of over 300,000 sellers.

Magalu’s Journey

Now, let me share a glimpse of Magalu’s remarkable journey. Our company traces its history back to 1965 when Luisa Trajano and her husband, Mr. Pellegrino, purchased a gift store in the city of Franca. To give this life project a new identity, they organized a public contest to choose a new name for the store. As Luisa was a popular and beloved salesperson at the time, the contest ultimately chose the name ‘Magazine Luisa’ in her honor.

Since its inception 66 years ago, Magalu has maintained a strong focus on innovation and business expansion. Over the past two decades, the company embarked on a digital transformation journey. After commencing online sales operations, Magalu made strategic acquisitions of more than 20 market-specific companies to accelerate its digital strategy. These acquisitions encompass logistics solutions, financial services, various content companies, and digital education.

This suite of resources includes an artificial intelligence tool, software that provides product recommendations based on user interactions on the platform, and various other solutions. One of the companies that Magalu acquired was ComSchool, where I originally came from.

Magalu boasts a robust operational structure. Currently, the company maintains 22 strategically located distribution centers across the country. We offer a fulfillment system, which serves as a substantial logistical solution for 3P sellers seeking to outsource their operations. Our retail operation is also exceptionally strong. Magalu was a pioneer in Brazil in implementing an operation of this scale in the country. Another pivotal asset is Luisa Labs, our proprietary software development unit, comprising over 2,000 engineers dedicated to creating solutions for logistics, FinTech, and enhancing user experiences.

Magalu’s Growth

The first chart illustrates Magalu’s remarkable growth in recent years. Regarding Magalu’s growth in the second quarter of 2023, even amidst a 15% decline in overall e-commerce market growth, we achieved a remarkable 7% growth. This represents a substantial 22% difference, underscoring our impressive performance.

The Brazilian e-commerce market has been, in general, facing economic challenges here in Brazil, leading to a negative overall result. Despite these adverse conditions, Magalu demonstrated robust growth compared to e-commerce in general. 

We can observe a critical factor not only for Magalu but for several other retailers in Brazil: the impact of the SELIC rate. It’s important to highlight that the second quarter of this year marks the last period before interest rates began to decrease. This decrease in rates contributes to a more optimistic outlook for our operations.

Despite the diversification efforts that Magalu has undertaken in recent years, we still maintain a strong presence in durable categories, encompassing items like stoves, refrigerators, TVs, and smartphones. We are leaders in representing these categories in Brazil, and they constitute a significant portion of our GMV today. However, upon reviewing this slide, it becomes evident that the correlation between the performance of durable categories in the market and the SELIC rate is notably high, while the correlation with long-tail categories, which have become increasingly important for our base, is almost negligible. These long-tail categories, although vital for us, do not account for the majority of our revenue. As the SELIC rate rises, we can observe a corresponding decline in total sales for these durable categories.

However, this trend doesn’t frequently affect long-tail categories, which is why our strategy is to emphasize these other long-tail categories. By analyzing these factors, we gain insight into how the SELIC rate influences our sales for durable goods.

Magalu’s Online vs Offline Growth

Over the last four years, Magalu has recorded an average annual growth of 27% across both online and in-store sales. In the second quarter of 2023 alone, we achieved a revenue exceeding 14 billion reais, representing Magalu’s highest-ever market share level. When we compare 1P and 3P sales in the e-commerce channel, valuable insights emerge.

Over the past four years, Magalu has experienced an annual growth rate of 46%, reaching 10.7 billion reais in revenue in 2023, primarily attributed to online sales in the e-commerce channel. While 1P sales remain dominant, it’s evident that 3P sales are gaining traction at Magalu. Notably, Magalu’s e-commerce sales grew by 7% when comparing the second quarter of 2023 to the same period in 2022. This resulted in a 6% percentage point increase in market share, in contrast to a 15% decrease in Brazilian e-commerce overall.

Magalu 3P vs 1P sales 

Speaking specifically about 3P sales, which are sales on our marketplace, we’ve witnessed substantial growth over the last four years. The marketplace has enjoyed an average annual increase of 64%. In the second quarter of 2023, the marketplace achieved a revenue of 4.2 billion reais. When we compare the second quarter of 2022 to the same period in 2023, we observe a 15% growth in sales volume, specifically for 3P sellers.

Magalu Sales Distribution Across Channels

Notably, Magalu’s marketplace sales have now surpassed sales from our physical stores. This points to the marketplace’s potential to become our primary sales channel, aligning with our objectives. In the second quarter of 2023, 29% of Magalu’s sales originate from the marketplace, primarily through 3P partners. When we focus on online sales, 3P sales account for 39% of the total.

At Magalu, we’ve welcomed over 300,000 sellers, a significant increase from the 32,000 sellers in 2020. One of our core missions is to digitize Brazilian retail and make it accessible to everyone.

Black Friday Campaigns

Here at Magalu, we refer to Black Friday as the ‘Black of Blacks,’ a tradition here in Brazil. It holds great importance. The ‘Black of Blacks’ at Magalu involves a series of targeted initiatives to prepare customers and generate sales for the 300,000 sellers. Both in physical stores and through the 1P sales model.

In recent editions at Magalu, we’ve implemented successful marketing initiatives. For instance, there’s an action called ‘Agora ou Nunca,’ which translates to ‘Now or Never.’ This promotion offers exclusive deals during the Black Friday campaign period. These are special discounts that won’t be repeated on Black Friday itself or offered at a lower price. This strategy not only drives early sales but also benefits the entire marketplace ecosystem. Consumers here have come to anticipate the ‘Agora ou Nunca’ event and prepare to make purchases during this period.

Another action Magalu undertakes is significant investments in media and sponsorships of various digital influencers, web celebrities, and even internationally renowned artists like Anitta. Magalu hosts a show for the ‘Black of Blacks,’ an online live event focused on both sales and entertainment. During this event, numerous offers from the 1P sales system and marketplace partners are launched.

Black Friday Growth

Just to give an idea, Black Friday here for us in Magalu generates substantial results. In 2022, we saw a 70% growth in GMV pre-Black Friday, the weeks before the day, the Black Friday itself. Starting from November, we recorded a double of the sales compared to other months on average, for example. And as expected, Black Friday at Magalu yields significant results, not just for the company, but also for all the involved partners. Last year, we had more than 19,000 sellers with sales on Black Friday, compared to more than 11,000 sellers the year before. This represented a 78% year-over-year GMV increase when looking at the small and medium sellers. For many of these small sellers, Magalu was the primary sales channel during this period of Black Friday. 

Top-selling categories and trends

Consumers in Brazil, as well as in other countries around the world, are well-acquainted with the concept of Black Friday. People here are prepared to purchase a wide variety of products. What sets Magalu apart is that our customers are comfortable buying high-ticket items because they know they will find genuine discounts at Magalu.

In 2022, Magalu also organized an event called ‘Feirão de Ofertas,’ a special negotiation with select sellers that offered even better prices and discounts to our clients. The results were remarkable last year, with monthly sales growth of 394% when comparing November to October. Year over year, the growth was even more impressive at 568%. In terms of website visits, we saw a 214% growth in November compared to October and a remarkable 496% year-over-year increase. Conversion rates also showed a substantial improvement, with a 35% month-over-month increase and a 60% year-over-year increase. Additionally, the Average Order Value saw substantial growth, with a 22% increase month over month and an impressive 41% year-over-year increase.

Now, let’s discuss specific products that were popular last year. Customers purchased items such as the iPhone 11, whiskey, refrigerators, gaming laptops, and smart TVs. These were the top-selling items here at Magalu.

Black Friday Preparation

And this year, we’re prepared to make Black Friday even more exceptional. For us, Black Friday kicks off at the end of October. In the first week of November, we initiate early offers, launch numerous campaigns, including ‘Agora Nunca’ (Now or Never), which I mentioned earlier, and other exciting initiatives. One such initiative is ‘Esquenta Black Friday,’ a pre-Black Friday event designed to build anticipation among our audience. And finally, we have the ‘Black Friday’ itself, which takes place on the last Friday of November.

In 2023, Magalu will roll out massive advertising campaigns across various media channels, including major television networks such as Globo, Band, and Record. We’re also investing in prominent social media platforms and content on news portals. We’ll run continuous ads promoting the ‘Black of Blacks’ at Magalu. Another significant action is our sponsorship of a television program called ‘Domingão com o Hulk.’ Luciano Hulk, a Brazilian superstar, hosts this show, which airs on Sunday afternoons during prime time on Brazilian television.

Magalu’s Importance in E-commerce

To give you an idea of our reach, Magalu has been the most searched brand on Google during Black Friday for the past two years, capturing nearly 20% of the search share during this period, as shown in the data. Furthermore, Magalu has generated the highest engagement related to sales on Twitter (X). This underscores the strength of Magalu during Black Friday, which is one of the most crucial dates for us in Brazilian retail.

In conclusion, here are some of the opportunities for long-tail product sales that customers are seeking during this Black Friday. Of course, there is room for many other categories, as Magalu offers a diverse product mix.

I’d like to express my gratitude for this opportunity and say that it’s a pleasure to be here with you, presenting a glimpse of what Magalu represents in Brazil, particularly during the highly anticipated Black Friday season.

nocnoc Introduction

Maria Cecilia:

nocnoc is the largest cross-border store in Latin America. We own mega stores across Latin America’s biggest marketplaces, including Magalu, in more than five countries, such as Brazil, Mexico, Chile, Colombia, and Argentina. We’ve been assisting sellers since 2018, not only in listing their products on marketplaces but also in developing their entire market strategy. This includes helping them establish their presence in Latin America, crafting marketing campaigns, devising pricing strategies, and managing logistics and fulfillment. That’s a brief overview of nocnoc, and I’ll provide more details shortly.

Benefits of cross-border selling in Brazil

Now, let’s explore the benefits of cross-border selling in Brazil, particularly during Black Friday. One of the most significant advantages is that you can significantly boost your sales. Brazil is the biggest e-commerce market in the region and one of the largest globally. Furthermore, many consumers actively search for online deals, making online shopping a popular trend.

The second point is the diversification of sales. In the US you have just one dominant marketplace but in Brazil you have multiple marketplaces. It’s really important to not rely only on one single marketplace and to be able to expand into multiple markets.

The third point is it allows you to test the market at the most profitable time of the year regarding e-commerce. So, if you start selling now in the Peak season, it’s a great time to sell and to offer your products to consumers who are really looking for deals and for real discounts and are searching online because it’s not the same that if you start, for example, in January that you start now that we have Black Friday but also Cyber Monday, we have Christmas coming as well. 

How to ensure your success in Brazil

Brazil is one of the most complex regions in Latin America. Without a thorough understanding of how it operates, its regulations, restrictions, and compliance requirements, you may encounter various challenges.

Regulations

Staying compliant with product restrictions, permitted prices, weight limits, and dimensions is also critical. In this regard, having the support of a local partner with a deep understanding of the market is indispensable to avoid such complications.

Localization

Additionally, localization is a vital consideration. Ensure that your products are well-suited for the Brazilian market, and that your titles and descriptions are optimized for the Portuguese-speaking audience. A common mistake is directly translating English keywords to Portuguese, which can be a significant error.

Reputation

Reputation matters greatly in Brazil. Brazilian consumers pay close attention to the reputation of sellers, stores, and product ratings. It’s crucial to provide prompt and accurate support in Portuguese to Brazilian customers. Being active on platforms like ReclameAqui is also vital. In Brazil, ReclameAqui is a peer-to-peer review platform where consumers pose questions to sellers, stores, and marketplaces.

Pricing & Marketing

Finally, an effective pricing strategy and well-crafted marketing campaigns are crucial to your success. Ensure you’re selling on marketplaces that invest in marketing campaigns to attract consumers effectively.

Black Friday Success Case

I’d like to share a brief summary of a successful collaboration we had with a perfume retailer last year. They joined us in October 2022, right before Black Friday. Upon their approach, we conducted a thorough analysis of their catalog and identified more than 6,000 products suitable for Brazilian marketplaces. We optimized the titles and descriptions of their top-selling products for the Brazilian market, ensuring that they made sense in Portuguese and were tailored for maximum conversions. We expanded their presence to four different marketplaces.

Additionally, we helped them navigate the evolving customs regulations that affected product imports, providing expert guidance on which products could and couldn’t be imported. Special deals, such as a 20% discount and cashback offers, were applied to their products. Together, we crafted a successful strategy to boost their sales. The results were outstanding, with an impressive increase in sales of over 200% compared to the previous month, and these high sales figures continued throughout the peak season.

This example illustrates how we assist international retailers in successfully starting to sell in Brazil. Our support goes beyond just expanding to marketplaces; we guide them through the entire process. We help them establish effective marketing campaigns, develop pricing strategies, and ensure their products comply with the market’s regulations. We handle the complexities of Brazil, making it feel like selling as a local business, even when they’re based in the US.

Selling cross-border on Magalu with nocnoc

Now, let’s delve into how we can assist you in selling on Magalu. We have a cross-border mega store on Magalu, where we assist sellers in listing their products. The process is straightforward. Once you sign up with nocnoc and share your listings or ASINs, we extract all the necessary information and upload your products to our store. We optimize them, translate them to Portuguese, and manage not only the listings but also translations, discount campaigns, customer support, and ensure our store maintains an excellent reputation. As a result, your products will also enjoy a positive reputation.

Why nocnoc?

Now, you might be wondering why choose nocnoc over attempting to sell alone in Brazil. First and foremost, when you sell through nocnoc, you won’t need a legal entity in Brazil. You’ll be selling directly from the US. All you need to do is send your orders to our US warehouse, and we’ll take care of last-minute deliveries, fulfillment, cancellations, returns, and everything in between. It’s a hassle-free process.

We offer a comprehensive 360-degree solution that handles all aspects, making it feel like selling from the US while establishing a local presence in Brazil. You’ll also avoid any customs issues, restrictions, or compliance concerns. We stay up-to-date with the latest regulations in Brazil. For instance, Brazil is currently undergoing a significant regulatory change called “Remessa Conforme,” and nocnoc is actively participating in the program to help its sellers sell effortlessly across borders. Moreover, we ensure you can sell with zero risk. Even if your orders get stuck in customs, or if they are canceled or returned, we have a special program to ensure you get paid, making it a risk-free selling experience.

Get started with nocnoc

To get started with nocnoc, it’s a simple process. Simply fill out the form, and a member of our team will review your store link and product offerings. They will assess whether your products are a good fit for the Brazilian market. We don’t want you to enroll in a program if we’re unsure about the potential success of your products in Brazil. We make sure your products comply with Brazilian market requirements before you begin selling with nocnoc. Once your account is approved and active, you can effortlessly upload your products, and they will be promptly published on the Brazilian marketplaces we partner with, including Magalu.