Brazilian site accused of unfair competition, Meikeduo: Nonsense

Founded in Argentina in 1999, Makedo is the largest e-commerce platform in Latin America, followed by B2W, Luiza, Via Varejo and Amazon. In 2020, Makedo's market value reached $84 billion, making it the company with the highest market value in Latin America.

Meikeduo's business covers 18 countries in Latin America , with Brazil, Argentina and Mexico being its top three markets. From January to September last year, the total number of active users on the Meikeduo platform doubled, half of which came from Brazil, which is also Meikeduo's largest source of revenue.

(Marcos Galperin, founder and CEO of MakeDo )

However, according to a report on the americaeconomia website on February 12 , the Brazilian Retail Industry Association IDV is preparing to submit a lawsuit to the Brazilian competition regulator, the Administrative Council of Economic Defense (CADE), against Meikeduo for allegedly creating unfair competition due to tax evasion.

The association includes 70 major Brazilian retailers, including Carrefour, McDonald's, Estee Lauder, Zara, Lojas Americana, Luiza, Netshoes and Avon.

IDV, on behalf of the association's retail members, argued that Brazilian merchants who sold goods through the Meikeduo platform without issuing invoices brought Meikeduo sales revenue that was three times higher than normal , and expressed the hope that Meikeduo would produce financial receipts for all products it sold on the market.

According to the allegations, this practice on the Meikeduo platform is equivalent to providing "subsidies" to consumers, allowing them to sell goods at prices lower than those of regular sellers in the market, which is actually unfair competition.

Even Flavio Rocha, owner of Brazilian fashion retailer Riachuelo, jokingly calls the Mercado a "camelódromo" (camel bush), satirizing it as an illegal large-scale street trade fair.

Meikeduo denied the allegations made by other Brazilian retailers.

Fernando Yunes , senior vice president and manager of the Brazilian site of Mercado, called IDV's allegations a "false propaganda campaign" and determined that the retailers involved in the allegations actually had a "lack of understanding" of how Mercado operates.

Meikeduo executives also insisted that the company has paid all taxes and has been working for years to formalize the suppliers of goods on the platform. For example, when a user reaches a frequency of 1 sale per day , he is required to create a micro-enterprise. By 2020, 51,000 users had registered and opened stores on the platform as a result.

Fernando Yunes clarified in a statement: “Currently, 80% of Meikeduo’s sales are shipped through merchants using our logistics network. In this case, the sellers are required to issue invoices . We even have free software to help sellers create invoices. Only 5% of sales come from individual merchants selling personal second-hand products or hobby-related products, who do not need to issue invoices.”

Meikeduo

Unfair competition