2. The trend toward e-commerce in emerging markets has been reinforced by the COVID-19 crisis.
Retailers with a strong e-commerce presence have experienced positive sales growth in April and May despite the COVID-19 crisis. For example, Brazil’s Magazine Luiza, also known as Magalu, registered physical store sales growth of -84% in April and -53% in May, reflecting the impact of store closures due to COVID-19-related lockdowns. Over the same period, however, Magalu’s e-commerce sales grew substantially over the same period, with total e-commerce sales growth of 138% in April and 203% in May. The increase in e-commerce sales at Magalu more than offset the effect of physical store closings, leading to 7% total retail sales growth in April and a whopping 46% total retail sales growth in May. Furthermore, this growth has been driven not just through increased volume per customer, but the addition of new customers. We expect these gains in market share to be sustained, helping our positions in Magazine Luiza and in other e-commerce names such as Mercadolibre, Alibaba, and JD.com.