CHAPTER 7: TECNOLATINAS PROFILES
E-commerce in Brazil has a name: B2W
Estimated valuation: US$ 6.5 B
CEO: Anna Christina Ramos Saicali
HQ: Rio de Janeiro
Offices: Rio de Janeiro, Sao Paulo
B2W is one of the largest digital companies in Latin America, and one of the main actors in the E-commerce industry worldwide. Born in 2006 out of the merger of Subarino.com, among the region’s leading online retailers, and Americanas.com, Brazil’s leader in the segment, the company kicked off with a R$6.5 Billion ($2.1 Billion) valuation, and has been expanding ever since. The company is owned by Lojas Americanas, which controls 55% of the equity, with the remaining 45% free floating on the BOVESPA stock exchange in Sao Paulo.
Today B2W manages a rich portfolio, which includes different major online retail stores in Brazil and Latin America, financial services linked to these sales channels, and a corporate services arm that serves its businesses and third party companies like mobile developments, logistics, and order tracking, among others.
Nevertheless, Americanas.com remains B2W’s largest, and most renowned business, acting as the digital arm of Lojas Americanas, one of Brazil’s leading department stores. With a catalogue of more than one million products, a marketplace that serves third party stores and allows them to take advantage of Americanas’ brand name and services for a commission for every sale, and multiple sales channels that include its signature web store, a call center that offers telesales, and more than 900 self-service kiosks located at the brick and mortar stores and that allow customers to purchase directly from those locations, this is Brazil’s leading e-commerce site. The physical Americanas stores operate as a separate business owned by a different company.
Another of B2W’s powerhouses is Submarino.com. A pioneer in the digital commerce segment, founded in the early days of the Internet. Today, it has become a leading online department store, with a catalogue that extends across thirty categories, focusing on technology and home appliances. The website operates only in Brazil and drives a big portion of its sales through a telesales channel, similarly to Americanas. Submarino.com also operates Submarino Viagens, an online travel agency with regional presence in Argentina, and Submarino Finance, a financing service for the store’s customers that has issued over 1.3 million credit cards in Brazil.
On the consumer side, B2W also owns and operates Shoptime, a television sales network that relies heavily on its online channel to drive sales, and Sou Barato, an online outlet store that offers electronics at discount prices. On the B2B side the group owns 14 different companies in the IT, consumer experience, intelligence and analytics, marketplace integration and logistics sectors. They all mainly serve their main businesses, but also other third party clients. Additionally, B2W (?) runs the e-commerce stores of several top name brands, like Lenovo and LG, which rely on its infrastructure to drive their online sales.
As of the second quarter of 2016, B2W’s combined businesses generated R$2,500 ($780.12 million) in revenue, up 7.2% since 2015, and hold a market share of 25,4% of the Brazilian E-commerce market.
With rising internet connections and increasing access to financial tools for the Brazilian middle class, the E-commerce sector in the country is projected to keep growing over the next years, reaching a magnitude of $25 Billion by 2018, according to eMarketer, placing the country as the 10th largest online retail market worldwide.
In order to stay ahead of new competitors, both domestic and international, B2W is implementing a serie of strategies. The first is to put special emphasis on mobile, launching applications for all of its stores and adding extra functionalities that encourage shoppers to use them. The strategy paid off as all four apps generated 2.3 million downloads in the first half of 2016, resulting in a massive growth in mobile traffic, which now accounts for 49% of all visits. Furthermore, the websites are also innovating with new products and services, such as Submarino Prime, which allows customers to experience a premium shopping experience for a monthly fee.
Additionally, in order to capture an important portion of newcomers into the E-commerce space, B2W allows third party vendors to sell their products on the company’s stores. It hence prevents popular brands from becoming potential competitors instead turning them into partners.
Other innovations in the fields of online advertising, logistics and business intelligence have allowed B2W to tune its customer acquisition strategies to generate dynamic pricing and promotions and to offer deliveries throughout the country’s enormous territory. This has allowed the company to gain significant advantages over its competitors, especially foreign companies like Amazon and Alibaba, which are increasingly popular among Brazilian consumers for their prices and variety.
E-commerce is one of the most competitive industry in the region. With its great growth potential, it consistently attracts new startups and international juggernauts. However, by betting on constant expansion and innovation, B2W has managed to stay ahead of the game, and will most likely keep leading the sector in Brazil for the years to come.
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