July 4, 2019 / 10:59 PM / 18 days ago

Brazilian e-commerce firm B2W tests drones to tackle logistics challenges

SAO PAULO, July 4 (Reuters) - Brazilian retailer B2W Companhia Digital SA is testing the use of drones to transport products from its distribution centers and hubs to its stores, in a push to gain efficiency and tackle the country’s complicated logistics and security issues.

B2W is the first homegrown retailer in Brazil to experiment with drones in its logistics, following similar attempts earlier this year by a local delivery startup known as iFood.

Drones still lack regulation in Brazil.

“We are working closely with the air space regulation agency, Anac, to help create these rules in Brazil. ... We expect to start using drones in our distribution by January 2021,” Fábio Abrate, B2W’s chief financial officer, said in an interview on Thursday.

He declined to disclose the amount the company is spending in the venture.

B2W, which operates local e-commerce brands Submarino, Americanas.com, Sou Barato and Shoptime, is a subsidiary of brick-and-mortar retailer Lojas Americanas, with over 1,500 stores across Brazil.

Initially, the group will use drones to move merchandise from its 15 distribution centers and 200 hubs to stores. “Delivering straight in the customer’s house is not something for now,” Abrate said.

The drone being tested uses technology by Brazilian software engineering company SMX Systems. It can reach up to 36 kilometers per hour (22.37 miles) per hour and may carry up to 2 kilograms, according to B2W.

In an additional effort to stand out in the increasingly competitive Brazilian retail market, B2W is boosting financial solutions to both clients and sellers of its e-commerce platform. Almost a year after launching a web-based wallet - now with 2.5 million users - the company recently started offering payroll loans to retirees in a partnership with Banco Cetelem, a unit of France’s BNP Paribas SA. (Reporting by Gabriela Mello Editing by Leslie Adler)

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