Digital Change for Brazilians

We know there are companies shifting toward digital change, but what about those companies that are truly disrupting their markets? Our Digital Disruptors series profile these companies that are heating up the volcano that is the digital transformation industry. This month, a Brazillian online marketplace, Olist.

Ecommerce has already began disrupting traditional brick & mortar retail shops around the globe. Last-line delivery companies have been gaining traction and market share since the beginning of the 2020 pandemic lockdowns.

Enter Olist: an e-commerce marketplace integrator emerging with unique purpose and value proposition to the Brazilian market. The company, founded in 2015, quickly rose through the ranks as the de-facto go-to address for large & small retailers in Brazil. How does Olist enable seamless access to the booming emerging market of Latin America? With a 211 million consumer market and double digit spending growth year-over-year for the past 10 years, we have no choice but to pay attention.

Olist is backed by 500 Startups, quickly becoming competition for more well-known companies in their sector, and has been backed by SoftBank Vision Fund in 2018 and 2019. Olist since then, has grown to become a centaur ($100M+ valuation) in the start-up arena.
What’s the Catch?

Olist began its journey in the Brazillian retail industry as a pivot from an earlier business model, an artisan marketplace, conceived by founder Tiago Dalvi.

Global giants in e-commerce, Alibaba and Amazon specifically, have struggled to penetrate the Brazilian market in sufficient returns. Brazil has a diverse and extremely fragmented customer base, and Tiago saw an opportunity. Pivoting from his single marketplace business model to craft a unique digital model to satisfy fragmented customer base and dispersed retailers on the market, Olist was born to integrate brick & mortar traditions and artisans alike to automate the tedious essential tasks for small enterprises.

The company began experiencing rapid traction; expanding its automation, intelligence, and integration services to all regions of Brazil.

The Core Disruption

Diverse players in Brazillian retail e-commerce have already taken shape within the last 10 years. Larger global e-commerce marketplaces, such as Amazon, had entered the scene in small numbers, while local retail giants developed e-commerce capabilities and niche hybrid omnichannel retailers. At this time brick and mortar retailers, merchants, and artisans stayed on the offline front to reach consumers as best they could.

Olist woke up to an era of retail chaos in 2015. Large e-commerce platforms failed to deliver a satisfactory solution for Brazilians, leaving Olist to become the glue that holds brazillian e-commerce together. Olist provides seamless and direct access to the diverse consumer population of Brazil through its integration in a Software-As-A-Service (SaaS) model. Today, Olist helps 12,000+ retailers become automatically integrated to 13 online marketplaces from Amazon, Mercado Livre, to Carrefour Brazil and B2W Digital; totalling to over 300 “Olisters.”

Olist’s unique business model allows the company to provide differentiated services to online and offline retailers alike; all within a single platform. The value of the Olist platform and Olist Store comes from the hyper-automation of e-commerce workflow, advanced analytics, data visibility, and seamless integration into 3^rd party retail platforms.

Digital Superpowers

Design: Olist provides a state-of-the-art UX to the platform users that utilize more than 86+ modern technologies in its stack to keep the platform as smooth and clean as possible. The one-shop to access all large retail marketplaces simplifies the design challenges for users to access crucial data and functionality.

Connectivity: Olist connects each client operation seamlessly in its system from cataloging to shipment. The marketplace data is also collected holistically to provide real-time dashboards of performance metrics based on sales, views, advertisements and marketplace comparisons. The users connected into more than 7 large retail marketplaces from a single point-of-view simplifies the complex and recurring tasks of e-commerce operations. Olist provides connectivity to regulative bodies of Brazil to ease of access to critical information, verification and approval processes.

Intelligence: Olist provides extensive data visibility, analytics and automation features in its solution portfolio. The company provides real-time feedback on pricing of goods on multiple platforms and can provide all the analytics capabilities of marketplace metrics in a holistic overview pane. Olist also provides best-practice work streams and best-practice use cases to utilize their platform form multiple resources.

Speed: One of the key selling point of Olist platform and solution subscription lies behind the operational efficiency and rapid cycle time for market entry and steady e-commerce operation. Registering in Olist shops or Olist store takes 3 minutes to enable and most of the operation inside the platform real-time feedback and insights to users.

Lessons Learned

Incumbents in the retail arena have realized the importance of operational resilience and e-commerce business enhancement during the COVID-19 Lockdown periods in 2020. However, one critical component of the story is having full e-commerce or hybrid models can provide other problems altogether.

Companies should realize the differentiated and fragmented market conditions to utilize their strengths and focus on them rather than cover the entirety of the e-commerce area by themselves. Ecosystem approach and digital strengths have played a critical role in the success of Olist over the past 5 years. Combining digitalization principles in areas of technology,  people, operations, and governance creates solid value for end consumers of retail market as well as the players.

E-commerce and brick & mortar retail will stay on the retail scene mutualistically in the foreseeable future; however, on both spectrums only incumbents that adopt to the new norms and digital realities will survive for the next era for retail industry.