Brazil’s Magazine Luiza to compete with Amazon and Mercado Libre for ad revenue

Contxto – One Brazilian company is venturing into new territory.

Last Thursday (6), Magazine Luiza—a major Brazilian retailer—bought Canaltech (a media company) and startup inloco’s online content platform, Inloco Media.

Through these acquisitions, it wants to hold its own against some major competitors in the e-commerce and advertising markets (you know who… Don’t you?).

Magazine Luiza wants to monetize on ads

With its physical stores shut down due to the coronavirus pandemic, 53 percent of Magazine Luiza’s sales have stemmed from e-commerce. The retailer wasn’t completely blindsided by the Covid-19 pandemic, as it’s been seeking to digitize operations and sales since 2011. 

And its recent acquisitions of Canaltech and inloco’s online content platform are part of that strategy to promote its own products… as well as those of its marketplace vendors.

In short, it’s debuting into advertising.

“The goal is to monetize audiences through Canaltech’s content and Inloco Media. The union between e-commerce, content, and advertising is a booming business across the world. We want to be a part of it and thus, offer new services to our sellers,” says Frederico Trajano, CEO at Magazine Luiza.

An e-commerce giant looking to monetize via online ads… now, where have I heard that before?

Oh yeah, Amazon and Mercado Libre.

E-commerce and ad competition 

Evidently, Magazine Luiza doesn’t want to slump behind its competitors within its native country. 

While Mercado Libre is undeniably the leader in e-commerce, Magazine Luiza and Amazon often compete fiercely for second place. 

But the Brazilian retailer’s local acquisitions can lead to an additional revenue stream, but now through advertising. It’s also a strategy to attract more vendors to its marketplace.

We’ll just have to wait and see if the maneuver gives it an edge.

Related articles: Tech and startups from Brazil!

-ML