Favelas, Americanas’ next frontier in e-commerce By Reuters


© Reuters. Aerial view of the Paraisópolis favela in São Paulo. 4/2/2020. REUTERS/Amanda Perobelli

By Aluisio Alves

SAO PAULO, (Reuters) – Americanas (SA:) is expanding the delivery of parcels in favelas, trying to establish a position among an audience of millions of underserved consumers and to lock in the increasingly fierce competition of e-commerce in Brazil.

After a test in April, the retailer extended the project to another four of these communities this month, including Rocinha and Vila Cruzeiro (RJ), as well as Heliópolis and Cidade Júlia (SP). The model consists of the delivery of packages by Americanas on the margins of the favela, and a container that serves as a logistical center. From there, the ‘last mile’ is carried out by residents under the direction of G10 Favelas, a group of leaders for social and economic impact initiatives in these communities.

The model was expanded after Americanas has reaped a nearly six-fold increase in the daily number of deliveries in Paraisópolis, one of the largest favelas in São Paulo, since April, given the greater success of Favela Brasil Xpress couriers in reaching homes in alleyways and alleys, many without zip code or numbering.

“The goal for 2021 is to expand the project to 50 slums, further reaching more than 300 communities in the country,” Americanas operations manager André Biselli told Reuters.

According to the executive, the partnership, combined with inclusion projects such as scholarships in logistics for slum dwellers, has proven to be a more effective way of reaching clients by creating involvement with the communities.

Due to the frequent cases of truck robberies and robberies with parcel deliveries in these urban areas, usually on hills, with narrow streets and often dominated by organized crime, large retailers have started to avoid sales of certain products for delivery in favelas, such as electronics.

According to Biselli, since the beginning of the shared delivery model in Paraisópolis, there has been no security incident involving Americanas deliveries in that region.

The national president of the G10 Favelas, Gilson Rodrigues, says that residents of dozens of favelas across the country have asked for local delivery points as well and is also talking to interested companies from other sectors.

“We are showing that the population of the favela doesn’t want to be poor, but to have the same access as the others,” he said.

The president of the NGO stated that the project does not involve agreements with gang leaders and that it has been successful because of the perception that it benefits communities.

In addition to the delivery of parcels, the partnership foresees that businesses created by favela residents will also have their products sold on Americanas’ marketplace.

GIANT MARKET

With around 6% of the country’s population, according to an estimate by the Brazilian Institute of Geography and Statistics (IBGE), or around 13 million people, favelas have an estimated consumption of around 168 billion reais a year.

The Americanas movement shows how large retailers in the country are developing initiatives to reach this audience, especially since last year, when aid programs created to combat the effects of the crisis caused by the Covid-19 pandemic, some of them through accounts ended up accelerating the banking of millions of people in Brazil, including residents of regions less reached by public authorities and financial services, such as favelas.

The initiative also takes place after Americanas released second quarter sales results with growth below those shown by e-commerce rivals in Brazil, such as Mercado Livre (NASDAQ:) (SA:) and Magazine Luiza (SA:) despite the implementation of free shipping and incentives for sellers to use the service.

(Edition by Maria Pia Palermo)