The prospects for Magazine Luiza and Casas Bahia are more pessimistic. BTG cut its profit and EBITDA estimates, a measure of profitability, for the two companies’ next four years.
The survey also notes a “competitive advantage” of foreign companies Shein and Shopee. According to BTG, the analysis considers the development of payment platforms and the specialized logistics structure of the networks. There is also the expectation that Chinese company Temu will expand its operations in Brazil.
Asian companies, such as Shein and Shopee, are increasingly adapted to the local market, says the bank. Shein may have earned R$15 billion in 2023, more than double the R$7 billion estimated for the previous year. Shopee, with a wider range of products, had revenue of R$20 billion last year, estimates BTG.
After a more aggressive approach during the pandemic, companies active in e-commerce adopted more rational strategies to preserve margin and increase their acquisition rates, moving away from a growth-above-all mentality.
BTG Pactual Bank
The bank also reinforces that the process of falling interest rates can benefit Magazine Luiza. According to the report, the giant owner of 1,400 stores spread across Brazil tends to be one of the main beneficiaries of the Selic rate, currently at 10.75% per year after a cycle of six consecutive drops.
The weakening of the electronics and household appliances market is cited as an obstacle for Casas Bahia. According to BTG, the network that employs more than 47 thousand employees tends to suffer from high financing costs and future uncertainties.
Tags: Foreign companies gain space threaten national ecommerce
