Consumer Staples Author：EqualOcean News Jun 26, 2024 06:32 PM (GMT+8)

On June 24, 2024, Chinese cross-border e-commerce platform AliExpress(速卖通) announced a strategic partnership with Brazilian e-commerce leader Magazine Luiza (Magalu) to sell AliExpress's "Choice"(优选) series of products. Following this announcement, Magalu's stock price surged by 12%.

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The two e-commerce giants stated that the collaboration is expected to launch in the third quarter of 2024, with negotiations having started last year. Magalu emphasized in a statement that the "Choice" series represents high-quality shopping experiences from AliExpress, featuring products such as beauty items, electronics, and office supplies, known for their "best cost-performance ratio and delivery speed."

In addition to selling AliExpress products on Magalu's platform, Magalu's "1P" products (items sold directly by manufacturers or brands to consumers via the e-commerce platform) will be distributed across Brazil through the AliExpress platform.

Magalu CEO Frederico Trajano remarked that the partnership will complement both companies' products and sales channels. He noted that Magalu, as a leader in the Brazilian retail market, has significant advantages in logistics and omnichannel sales, and this collaboration will boost the online sales of Magalu's "1P" products.

AliExpress's Latin America Director Briza Bueno highlighted that the company's current focus is on selling refrigerators and other heavy appliances on the platform. "AliExpress doesn't have these products, but Magalu is very strong in this area," Bueno said.

Additionally, Magalu pointed out that AliExpress offers a more diverse range of products in categories such as computer accessories, fashion items, tools, and baby products. "This partnership provides greater growth potential for the two e-commerce platforms with the largest audiences in Brazil. The combined monthly visits of the two companies exceed 700 million, offering consumers a diverse product mix and high-quality curation and services," Magalu stated in their announcement.

Following the announcement, Magalu's stock price on the Brazilian stock exchange surged by over 12% on June 24. Marcos Duarte, an analyst at Brazilian investment consultancy Nova Futura Investimentos, commented that the announcement involving a strong player in the e-commerce market justified the investors' sudden interest in the stocks.

Pedro Marcatto, an expert from investment services company B.Side Investimentos, emphasized that this marks the first time AliExpress has partnered with a non-Chinese company and the first time Magalu will sell its products on another e-commerce platform. This collaboration is expected to create synergy between the two companies and expand their sales channels in the Brazilian market, potentially leading to increased sales and revenue for both parties.