New Categories
One of the pillars of the company ’s business strategy, called #TemNoMagalu, is to sell everything the customer needs or wants. Electronic appliances, household utilities, food, cosmetics, sporting goods, books, decoration items, personal hygiene products, and household cleaning products. At the end of June 2023, Magalu offered 37 million customers more than 100 million items from the most different categories.
An expansion in the number of categories sold by the Magalu platform directly stems from growth in the marketplace. In 1H23, Magalu reached the mark of 300,000 formal sellers connected to the marketplace. By integrating their stocks into the company’s ecosystem, Magalu quickly became a one-stop shop for selling all kinds of things.
Super App
Among Magalu’s different sales channels, the app has the highest strategic importance. “Mobile only and app first” is one of the mottos that guides the company strategy which is focused on Luizalabs. Therefore, the sales application, created in 2015, has been turned into a superapp. The superapp is a virtual environment where the customer can buy products from Magalu and their sellers, to access public services, and make online payments. In 2020, Magazine Luiza’s app recorded the highest number of downloads on iOS and Android systems. In June 2023, Magazine Luiza's app had 47 million monthly active users, with at least once a month of use. This customer base is the cornerstone of planning what will make up Magalu’s superapp.
Faster Delivery
By the end of March 2023, there were 22 centers solely dedicated to the storage and shipment of products and 206 Cross-dockings Hubs throughout Brazil. More than 1,190,000 square meters of storage area are part of Magalu’s complex distribution and logistics system. Over 1,300 physical stores spread over 20 states in the country quickly turn into small distribution centers capable of using the ship-from-store system: the distribution of goods purchased in stores. About 30% of space of most physical points are dedicated to storing items (for the company itself) to be sold digitally. The more stores are converted into distribution centers, the faster product can reach the customer at home. Faster shipping also translates into a better shopping experience. At the end of 2Q23, 83% of all products sold and delivered by the Magalu system reached their destination within 48 hours, this figure has been soaring, with Magalu Entregas development, our last-mile delivery operator. The connection between the stores, DCs and customers (last mile) are reached by over 13,000 transporters from the Luiza Network. They are self-employed professionals with access to technological tools, annual training hours, and provide services only for Magalu.
MaaS (Magalu as a Service)
The exponential increase in scale that the company intends to achieve in the shortest time possible depends on the capacity to attract the largest number of partners to our digital platform. More sellers means having an unimaginable number and diversity of items available. However, attracting these entrepreneurs, accustomed to acting in an analogical environment where all relationships are physical, is not sufficient for Magalu. This is how Magalu as a Service (MaaS) was born. Several technological services and tools were developed for the company which started being offered to the more than 300,000 Magalu sellers. MaaS, which now has a complete solution covering technology, payments and advertising, was developed so that companies that want and need to sell digitally can save on learning stages, which can consume years of investment and technology know-how.
Fintech
Magalu’s fintech offerings include solutions for individuals and marketplace sellers, as well as a Banking as a Service (BaaS) platform, which provides enterprise banking services, that was acquired in the Hub Fintech acquisition. Magalu’s fintech services include: a sub-acquring business; a digital bank account (MagaluPay); credit to consumers via the Luiza and Magalu Cards, and loans for individuals and sellers. Over the last 12 months, more than 95 billion reais were transacted through the Magalu ecosystem — a small fraction, given the company's potential. As part of our initiatives in this market, we launched Magalu Pay, our digital account, fully multi-channel and integrated with the SuperApp. Since then, 10.5 million digital accounts have been created. Magalu Pay, Hub and Luizacred are connected, making room for the creation and supply of digital financial services — prepaid card, credit card, loans for individuals and legal entities, insurance and cashback — for our customers and sellers (including Aiqfome restaurants). All in the same environment: the SuperApp.