Read this Friday’s edition of the FolhaMercado newsletter (21) – 04/21/2023 – Market

ANDsta is the edition of newsletterr FolhaMercado this Friday (21). want to receive it from monday to Friday at 7 am In your email? Sign up below:

---

Shein promises to be ‘made in Brazil’

Asian fast fashion retailer Shein signed an agreement with the Brazilian government committing to nationalize the production of most of the products sold by the platform in the country within four years.

• The measure was announced this Thursday by Minister Fernando Haddad (Finance), who also cited a company promise to generate up to 100,000 jobs in Brazil, one of the three main markets for the retailer.

Understand: Shein’s objective (pronounced xi-in) is to change the origin of the products that are sold in Brazil, which today come mostly from Asia.

• For this, the company promises to invest BRL 750 million in national textile production, according to the term of commitment signed with the Treasury.

• The amount will not be fully allocated to the installation of factories here, because this is not the retailer’s operating model.

Shein usually works with several partner manufacturers, which are connected to its algorithm —considered as the great differential in relation to competitors.

• The secret is in its AI (artificial intelligence), which tests in the app with 100 to 200 parts per model.

• If the demand for a given product is strong, the robot captures the trend, sends it to the manufacturer and production is scaled up. This avoids spending on inventory of stranded parts.

Why it matters: Shein’s nod comes shortly after the government backtracked on the measure that ended the exemption for international orders of up to US$ 50 between individuals.

• The retailer was considered as one of those affected by the tax collection.

“Digital Tax”: Haddad also spoke of the government’s plans to adopt a kind of digital tax on e-commerce orders.

• As determined by Sheetthe idea is not to create a new tax, but to improve the inspection system to facilitate collection “at source”, before shipping the goods.

---

expanding outlets

The outlets have only recently arrived in the country, but their rapid expansion shows how the model that brings together big brands at discounts has fallen in love with Brazilians.

• The debut was with Outlet Premium São Paulo in Itupeva, in 2009, and in the last four years there were five new units of the genre in three states.

• In the interior of São Paulo, two more are on the way: one in Ribeirão Preto (313 km from the capital) and another in Olímpia (430 km from São Paulo).

Which explains: sector executives highlight the high conversion of the model, that is, the relationship between the number of visitors to the site and the number of people who end up buying something.

• The mentioned percentages vary between 80% and 90% of people who go to the outlets and leave with bags in their hands, a number much higher than that of malls.

• Other attractions are the high average ticket (average price of what is sold) and the lower cost with units located outside major centers, but which are where there is high vehicle traffic –as is the case in Ribeirão Preto– or a significant flow of tourists – as in Olympia.

---

---

Take a break: Perrengue part 2?

Remember the Fyre festival, which sold expensive tickets to a series of events on a Caribbean island and whose failure was recorded in the documentary “Fyre Festival: Fiasco in the Caribbean”?

So, Billy McFarland, the party’s mastermind who spent four years in jail, said on twitter that Fyre Festival II will take place and asked followers to tell him why they should be invited.

Remember: McFarland was released from prison in 2022 after pleading guilty to fraud charges stemming from his role in organizing Fyre – an attempt to create a Coachella in the Bahamas that went terribly wrong.

• With a fine of US$ 26 million to pay, he gave an interview to the New York Times as soon as he left prison and since then he has been talking –in interviews or on Twitter– about his plans for the future, which even involve the creation of a media empire.

The documentary is on Netflix that shows the frustration of those who paid up to US$ 12,000 for an event that would have influencers and weight shows and ended up finding limp tents and soggy mattresses.

beyond the economy