Magazine Luiza: e-commerce as share of total sales 2016-2021

The outbreak of COVID-19 seems to have accelerated a trend in the business model of Magazine Luiza, a retailer founded in 1957 in Franca, Brazil. In 2021, online sales generated 71.5 percent of the company’s total sales revenue. The share is 1.6 times bigger than in 2019, before the pandemic, when less than half of the firm's sales were made online.

The magic of MagaLu

In May 2020, Frederico Trajano, CEO of Magazine Luiza and son of chairwoman Luiza Helena Trajano, said the holding could endure two more years with its physical stores closed – a measure the company had taken earlier that year in response to the pandemic. The retailer generated more than half a billion Brazilian reals in net income throughout 2021, around 50 percent more than in the previous year. Third-party online sales are becoming increasingly important for the digital revenue of MagaLu, as the holding is often referred to.

E-commerce competitors are ready

Magazine Luiza might be on the top of its game in the online retail segment, but there is serious competition. In terms of online gross revenue, it ranked first in 2020, followed by two other local players, Via Varejo and Lojas Americanas. Online marketplace Mercado Libre (of Argentine origin but known in neighboring Brazil as Mercado Livre) saw its net revenue in Brazil nearly double from 2020 to 2021.