Magalu faz parceria com o Mercado Livre para vender seus produtos

Magazine Luiza and Mercado Livre have announced a partnership to sell Magalu's 1P products on the MELI marketplace. This is a mutually beneficial agreement. For Magalu, the partnership aims to secure incremental volume with low cannibalization and attractive margins. Meanwhile, MELI will gain access to a range of products – such as appliances and furniture – that it has had limited penetration and logistical challenges with.

The initial catalogue to be sold on Mercado Livre comprises 28,000 items, including beauty products from Época Cosméticos and electronics and games from KaBuM. The partnership kicks off today with the opening of an official Magalu store within the Mercado Livre app. CEO Fred Trajano stated that the partnership addresses one of Magalu's strategic pillars for its new growth cycle: returning to online growth while maintaining profitability.

"We have more platforms operating in Brazil, the audience is much more fragmented, and our CAC is growing. We were seeing more difficulty growing online than offline with profitability," Fred told Brazil Journal. He added that the partnership with MELI ensures a positive contribution margin for the company. According to Fred, the contract margin with MELI is higher than the paid media sale Magalu does, but lower than the organic channel sales (when consumers enter directly into the Magalu app or website).

"We don't need to chase volume at any cost, so we always seek a positive margin point of view," he said. "And we see very low cannibalization. MELI's audience is much larger than ours, so we estimate that three quarters of the customers who buy our products on MELI would not be Magalu's customers." This is the third partnership of its kind for Magalu in the last two years.

In June 2024, the company made a similar partnership with AliExpress, with the Chinese e-commerce platform receiving the option to sell some of its products on Magalu's marketplace in return. Most recently, in June of this year, Magalu sealed a partnership with Amazon Brasil to sell a catalog of 12,000 1P products on the giant's marketplace.

Fred stated that these partnerships reflect a shift in Magalu's 3P strategy. "We abandoned being a generalist marketplace. We believe there is space for a few generalists in Brazilian ecommerce, and MELI is well positioned in this regard," Fred said. Now, Magalu is betting on category marketplaces like Netshoes, which specializes in sports, and KaBuM, which focuses on games.

"There are people who prefer to buy from one place with these products and specific filters," Fred explained. For MELI, the partnership will bring greater penetration in categories where it is not as strong, as well as access to Magalu's logistics. "MELI was born selling small products, and our logistics is built around small products.

Our fulfillment, for example, has corredors and shelves with small boxes that can't fit a fridge, TV, or cooktop," said MELI's CEO Fernando Yunes to Brazil Journal. Beyond the current partnership, both companies are in negotiations for another agreement involving the use of Magalu's over 1,000 stores as collection and return points for MELI's sales. This additional deal is still being shaped and could be announced in the coming months.