Magazine Luiza Buys Sode to Deliver Products Within Only 1 Hour
Magazine Luiza is buying Sode (Soldados de Deliver), an urban logistics platform, with the objective of accelerating its ultra-fast deliveries, those that are made in less than an hour.
The transaction, whose value has not been revealed, will add to Magazine Luiza‘s logistics operation 1,000 active couriers, in eight states and currently carrying out 2 million deliveries annually. The big attraction for Magazine Luiza, however, was Sode’s delivery management, routing and monitoring system.
“We are setting up a logistics operator, not only to strengthen Magalu and marketplace customers’ deliveries, but also to external partners,” says Luis Fernando Kfouri, Logistics Operations Director at Magazine Luiza, in an interview with NeoFeed.
Sode is already a partner of Magazine Luiza in the modality known as “ship from store”, in which deliveries are made from the store to the consumer who bought online within 1 hour. This modality is already present in 140 Magazine Luiza stores in 30 cities.
According to Kfouri, the goal is to be in all capitals with this type of ultra-fast delivery this year. Without giving precise delivery data, the executive says that in stores where this service has been implemented, it represents 70% to 80% of store sales.
Sode was founded in 2015, in Recife, by entrepreneurs Carlos Andre Montenegro and Mario Reis Bezerra Junior. It operates in Sao Paulo, Fortaleza, Joao Pessoa, Recife, Maceio, Salvador, Teresina and Aracaju, Ribeirao Preto and Campina Grande. With the acquisition by Magazine Luiza, the number will expand quickly, according to Kfouri.
Soon, Sode should also make ultra-fast deliveries to Magazine Luiza’s marketplace (3P) sellers, with delivery from the store. Sode should also fall into other categories, such as meals and grocery items.
In this area, Magazine Luiza has already made four acquisitions, showing an appetite to compete against iFood and Rappi. The first one, in September of last year, was the AiQFome app. In March, it acquired two more delivery apps: the ToNoLucro app and the GrandChef platform (restaurant management). In June, it was Plus Delivery’s turn, based in Espirito Santo.
“We place the delivery of food and supermarket products in our main growth drivers for the future. The main strategic rationale of the initiative is the increase in the frequency of purchases in our super app”, said Frederico Trajano, CEO of Magazine Luiza, at the time, to NeoFeed.
The company also strengthened its logistics system with the acquisitions of Logbee, in 2018, and the transport company GFL, in October of last year. On the same occasion, Magazine Luiza acquired the SincLog technology platform, used by GFL. With Sode, the retailer adds motoboys to this logistics network.
Sode’s transaction takes place amid a dispute between major online retailers to make deliveries faster and faster. The fight even reached the National Advertising Self-Regulation Council (Conar) last month.
Magazine Luiza and Mercado Livre turned to the agency to find out who would have the fastest delivery in Brazil. Magazine Luiza won this first round. But Mercado Livre will appeal the decision.
Magazine Luiza‘s rivals are also working to make deliveries faster and faster. Universo Americanas, which has the Let’s logistics platform, made 44% of deliveries within 24 hours. Today, 14% of orders are delivered within 3 hours, according to the first quarter balance.
Via , owner of the Casas Bahia and Ponto brands, already makes 42% of deliveries within 24 hours. In two days, 65%.
In this battle, Magazine Luiza has just raised nearly R$4 billion, in a follow-on that will be used to finance the purchase of the e-commerce platform for games and technology KaBuM!, the biggest business in the history of the Trajano family’s retail chain – the transaction was estimated at R$3.8 billion, with part in cash and another in shares.
Proceeds from the offering will also be used for Magalu’s expansion into new markets, investments in logistics, with the opening of new distribution centers and hubs, and payment for strategic acquisitions.
The digital bank will launch a credit service for foreign trade, as part of a strategy to attract companies with annual revenues exceeding R$ 24 million and to compete with large institutions such as Santander, Itau and Citi. The forecast is to include imports in the offer by the end of the year