Privalia bets on pop-up store and travel to grow in Brazil
- May 26, 2022
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One of the main online outlets in Brazil wants to increase the recurrence of sales of the more than 17 million people with active registration on the platform
One of the main online outlets of luxury brands in Brazil, the privilege is getting ready to enter the tourism market, a sector that has been shaken by the pandemic and waiting for new business models to resume.
Privalia’s project is to sell discounted rates during periods of high idleness — weekends at hotels dedicated to business tourism or weekdays in low season at resorts, for example. The new business in the travels should be on the air by the second half of the year.
Privalia’s main asset is in the public of 17 million people with recurring purchases on the e-commerce platform in Brazil alone.
It is one of the main markets for French veepee, the e-commerce holding company that owns Privalia and has similar businesses in 12 other European countries.
Every day, Privalia’s website in Brazil receives 500,000 visits. Each customer makes, on average, four purchases on the platform.
“We know the customer’s profile well, now the challenge is to offer more things to increase the recurrence of sales”, says Fernando Boscolo, CEO of Privalia’s operation in Brazil.
Privalia currently sells products in ten categories. The flagship is in flash sales — aggressive discounts, between 50% to 80%, and with an expiration date of a few days — on items such as clothing and accessories about to go out of line in luxury brands, such as the Italian Ferragamo, or affordable, such as the Brazilian Hering.
In the pandemic, the mix changed a lot there. “The categories food and beverages and home decor sales exploded”, says Boscolo, highlighting the fact that Privalia has entered these sectors with more weight in the middle of the quarantine and in response to the vertiginous changes in consumption demands due to social isolation. “Now, traditional categories like fashion and footwear are picking up momentum.”
On another front, Privalia is betting on a physical presence to expand its sales cannon. Since 2019, the company has been opening temporary stores — popup stores, in industry jargon.
Called Casa Privalia, the model reached its second edition this month. In six days, 10,000 people attended an event space in the west of São Paulo to see offers from more than 500 brands. In the period, 53,000 items were sold, a record.
In the second semester, the plan is to open another House of this type in Belo Horizonte, says Boscolo.
The bets come at a time of high demand for discounts. Inflation running in double digits has pushed consumers from affluent classes to all kinds of retailers capable of delivering products at lower prices – see the success of wholesale stores dedicated to a more premium experience, as is the case of Assaí.
impact of inflation
Inflation is now one of the main headaches for Boscolo, who has maintained a task force at Privalia to control cost pressure “on the fly”, he says. For this, the company has invested in purchases in larger volumes from suppliers, in an attempt to form a stock that is proof against the coming and going of costs.
On the other hand, price pressure has brought in new customers. “People want Privalia to be able to maintain their purchasing power in luxury brands”, he says.
In 2021, Privalia had net revenue of 966 million reais in Brazil, up 4.4% compared to the previous year. In the last five years, the company’s net revenue practically doubled in Brazil.
In 2020, the online retailer considered going public for the operation in Brazil, an operation that was aborted in March 2021.
Until it finds a window, the bet there will continue to be expansion with its own resources, like the one idealized now for the travel sector.
“Our strategy has not changed. We remain partners with 1,500 brands in ten categories and are expanding those numbers,” she says.