The Brazilian retail and e-commerce chain Magazine Luiza (or Magalu) announced the acquisition of Sode, a digital platform specialized in urban logistics for ultra-fast deliveries. Sode was already Magalu’s largest one-hour delivery service provider.
Founded in 2015 in Porto Digital, a technology hub in Recife city, Sode has proprietary technology focused on managing, routing, and tracking ultrafast deliveries made by partner drivers
Its algorithm directs orders to the closest delivery person, reducing the idleness of the delivery staff, eliminating logistics costs, and reducing the customer’s waiting time.
All the work is done by the algorithm. “As soon as the order is registered, the system triggers the demand to the store’s stockist and to the delivery person, without human interference,” says Luís Fernando Kfouri, Magalu’s director of logistics. “This is another step in the company’s strategy toward the digitization of Brazilian retail.”
Sode has more than 1,000 active couriers, who currently make an average of 2 million deliveries per year. The company operates in cities such as São Paulo and Ribeirão Preto, Fortaleza, João Pessoa and Campina Grande, Recife, Maceió, Salvador, Teresina and Aracaju.
With Sode, Magalu will expand its ultra-fast delivery service, where orders are ship-from-store within an hour. This expansion is strategic. The delivery service is present in 140 of the chain’s physical stores, located in 30 cities, and Magalu’s e-commerce conversion rate is 62% higher for orders delivered within one hour, when compared to 48 hours delivery.
Soon, Sode will also provide ultrafast logistics for Magalu’s marketplace sellers (3P), with delivery from the partner’s store, as well as operating in the delivery of other categories, such as meals and supermarket items.
In the last three years, Magalu has bought three companies in the logistics sector: Logbee, GFL and SincLog. “Sode is another piece that fits into the logistics structure we are building,” says Kfouri. Sode is the 11th company purchased by Magalu in 2021. In early July, the company closed the largest acquisition in its history with the purchase of KaBuM!