South American fashion e-tailor Dafiti takes on Amazon and Mercado Libre – WWD

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MEXICO CITY Dafiti, a fashion-focused online retailer operating in Brazil, Colombia, Chile and Argentina, aims to increase revenue by 30% to around 725 million euros, or $887 million at the rate exchange rate as it embarks on logistics and brand expansion.

With 7.3 million customers and 675,000 storage units, Dafiti is benefiting from the surge in online retail demand in South America caused by the coronavirus pandemic, Chief Executive Camilo Rueda told WWD. This, coupled with plans to add a series of new international and local fashion brands and investments to boost logistics and streamline customer service, should help the retailer grow this year and into 2021. Dafiti makes part of the Global Fashion Group, which manages online merchants. in emerging markets and is headquartered in Luxembourg.

“There has been a huge acceleration in e-commerce in South America, more than any other region, as penetration has lagged,” Rueda said, adding that Dafiti saw revenue jump 50% in the third quarter. , putting him ahead of the other GFGs. sites including La Moda in Russia, Zalora in Southeast Asia and The Iconic in Australia, which represent around a third of the group’s turnover.

Dafiti’s expansion comes as much bigger rivals Amazon, Falabella and Mercado Libre are also rushing to expand in Latin America, investing millions to bolster logistics, expand their product offerings and roll out their own fleets of vehicles and aircraft to expedite delivery. Mercado Libre has even launched its own digital bank, Mercado Pago, offering its online customers loans or credit cards with low interest rates – or deep discounts and/or free delivery of goods.

Dafiti hasn’t gone that far but is preparing to increase its warehousing capacity and introduce new brands to set itself apart from Chile’s Falabella, its biggest competitor in the fashion sector.

“Logistics have been a big issue this year,” Rueda said. “We inaugurated three new warehouses in Bogotá, Buenos Aires and a huge one outside São Paulo, which is the largest automated warehouse for fashion, with 100,000 square feet.”

The Brazilian site is gradually ramping up to process 5 million items, compared to 1.5 million items for the facilities in Colombia, where Rueda is located.

Dafiti is working to bring new international brands into its fold after adding Lacoste, Gap and Polo Ralph Lauren this year, Rueda said, adding that Gap has sold very strongly, becoming a “home run and one of our top 10 brands”. The company has also added a slew of local fashion brands in Colombia, including Arturo Calle, which rose to prominence as a supplier of men’s suits but expanded to sell many garments, including clothing. for children, a category that is growing rapidly in Dafiti markets, according to Rueda.

Dafiti has recently added major footwear brands such as Nike, Adidas and Skechers, especially in Chile, the executive said.

The possibility of adding H&M and Inditex labels such as Zara, Bershka and Pull & Bear in the coming months is also on the agenda. GFG recently introduced these labels in the Philippines and Russia. “We started working with them in October and it’s been very exciting,” Rueda said, adding that the goal is to eventually bring them to Dafiti.

Dafiti hopes to carve out a place for itself by combining exclusive global brands with local labels and developing strong direct relationships, while targeting a younger audience than Falabella, which has a much wider network.

“We recently launched Dafiti District to give local designers in Medellín, which is a big fashion and design hub, a chance” to sell their wares, Rueda said.

The grassroots effort aims to promote young talent and not necessarily established Colombian designers. Rueda expects Dafiti District to also roll out in Chile, Brazil and Argentina to appeal to its target audience of young consumers aged 18-30.

Rueda said Dafiti is the only fashion-centric e-tailer in all of its countries of operation except Brazil, where it competes directly with Netshoes and smaller outlets such as Shop2gether.

Not to be outdone by Mercado Libre – whose sales are expected to rise 46.5% to $20.5 billion this year – Dafiti is launching its own fleet of motorbikes for same-day delivery. The company offers free shipping with a minimum purchase of $40. It also introduces an Amazon Prime-like service to waive delivery charges for premium customers. Rueda says the merchant picks up returns from customers’ homes as an additional service that rivals lack.

The retailer has added millions of customers in recent months, with the number reaching 7.3 million in the third quarter. But competition is intensifying, not only from Mercado Libre but also from Amazon, which has just inaugurated three new warehouses in Brazil, bringing its total to eight and would create 1,500 jobs. The company can now ship goods to its Prime customers in more than 500 cities, up from 400 previously.

Magazines Luiza, Riachuelo and Lojas Renner are also rushing to boost online offerings and, like Mercado Libre, are scrambling to add banking and credit services to customers.

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