The trend: Earnings from Brazil’s two largest local retailers—Casas Bahia and Magazine Luiza—in 2025 show how the country’s ecommerce market is shifting, with partnerships, retail media, and AI emerging as key growth engines.

Zooming in:

Ecommerce momentum is diverging. Casas Bahia’s online sales rose 12.1% last year to $3.33 billion (BRL 18.63 billion), marking a rebound after three consecutive years of declines. While still below its 2021 peak of $4.15 billion, growth across both first-party and third-party channels signals improving momentum heading into 2026. Magazine Luiza, by contrast, moved in the opposite direction. While in-store sales remained positive, online sales fell 3.9% YoY to $7.92 billion (BRL 44.32 billion). In response, Magalu plans to tighten its ecommerce strategy by emphasizing higher-quality products and service through its curated “brandplace” marketplace model.

Partnerships are becoming central to growth. Both companies are leaning more heavily on external platforms to expand reach and capture incremental demand. Casas Bahia announced a long-term partnership with Mercado Livre that will allow it to sell its core assortment directly on Brazil’s largest online marketplace. Magazine Luiza is pursuing a similar strategy, outlining plans to accelerate first-party durable goods sales through partners such as AliExpress, with the goal of capturing external traffic that can ultimately funnel back to its own channels.

Retail media growth remains strong. Retail media is emerging as a major growth engine for both companies. Casas Bahia reported that new banner formats aimed at non-endemic advertisers expanded its advertiser base, helping drive 65% YoY growth in retail media revenues. Magazine Luiza saw similar momentum, with Magalu Ads revenues rising 54% in 2025, supported by improved advertiser performance and returns. The results suggest brands and sellers are increasingly integrating retail media into their marketing mix as ad formats, measurement tools, and data capabilities mature.

AI is becoming a strategic priority. Both retailers are also ramping up investment in artificial intelligence to drive growth. Magazine Luiza is positioning AI-powered commerce as a new sales channel, centered on conversational shopping through Lu’s WhatsApp integration and broader AI deployment across its ecosystem to deliver more seamless, personalized experiences. Casas Bahia is applying AI across operations to improve decision-making and efficiency, using advanced models for demand forecasting, cluster-level assortment planning, and price optimization to drive productivity and more data-driven merchandising.

Implications for retailers and brands: The results signal that Brazil’s retail ecommerce market is entering a new phase. Retailers are experimenting with a mix of marketplace partnerships, retail media, and AI to reignite growth and strengthen their competitive positioning.