Brazil’s local giant lost tens of billions, while Chinese e-commerce keeps growing bigger.

Over the past few decades, Casas Bahia has been the go-to place for Brazilian families to buy home appliances and furniture. This retail chain, operating for more than 70 years, has entered the daily lives of countless Brazilians through thousands of stores nationwide.

But the latest financial report shows a net loss of 10.1 billion reais, about 1.94 billion US dollars, in the second quarter of 2026, a surge of about 18 times compared to the loss of 555 million in the same period last year. What is even more disheartening is that this is already its eighth consecutive quarterly loss.

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As of May 2026, the group still had 1,039 stores. But the company has announced the closure of 298 stores and significant layoffs, equivalent to shrinking nearly 30% of its offline network at once.

According to local media reports, about 3,000 people were laid off this time, involving employees from newcomers who had just joined to veterans who had worked for more than twenty years. The company also filed for judicial reorganization with the São Paulo court, involving debts of about 17.3 billion reais. In 2024, it had just completed a debt restructuring of 4.1 billion reais, only to fall into crisis again just two years later. Brazil's persistently high interest rates are indeed an important reason that crushed it, but if the problem is attributed only to interest rates, the story is incomplete.

Image source: oglobo

In the same market, facing the same group of consumers, the scene on the other side is completely different.

As of February 2026, Shopee already had 16 distribution centers in Brazil, including 3 fulfillment centers and 13 cross-docking centers, plus more than 200 logistics hubs, over 3,000 partner pickup points, and about 45,000 partner drivers. And this is just the beginning—in 2026, Shopee announced it would open 10 new distribution centers in Brazil, increasing the total number of logistics centers from 16 to 26, a growth of more than 60%.

In the past, Casas Bahia got close to consumers through physical stores; now, Shopee is doing the same thing with warehouses, community pickup points, and delivery drivers.

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Temu has taken a different path. After entering Brazil, it first used advertising, subsidies, and low-priced goods to quickly acquire users—in July 2025, the platform's traffic in Brazil once reached about 410 million visits, becoming one of the most visited e-commerce platforms in Brazil at the time.

After gaining traffic, it began competing for local merchants, inventory, and delivery resources in Brazil, fully opening up local seller onboarding and promoting a 'local-to-local' transaction model. Goods stored in Brazil can be delivered in as fast as two business days.

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SHEIN is also making a similar shift. It is building local supply chains in Brazil, promoting platform-based merchant recruitment, and expanding from fast fashion to a full range of categories. By early 2025, SHEIN had about 30,000 local sellers in Brazil, and locally sourced goods once contributed about 60% of its local sales.

The playbook of these platforms is clear: leverage the efficiency and price advantages of Chinese supply chains, combined with the asset-light operations of the platform model, bypass the burden of traditional retail stores and staff, and directly capture consumers through low prices and product variety.

Even policies are helping Chinese platforms. In May 2026, Brazilian President Lula signed an executive order canceling the 20% federal import tax on cross-border packages under 50 US dollars.

Prices were already advantageous, and now taxes have been reduced, widening the cost-effectiveness gap for Chinese platforms even further. Taking a 45-dollar product as an example, before the new policy, buyers had to pay about 20 dollars in tax, bringing the total to 65 dollars; now the tax drops to about 9 dollars, so the final price is only 54 dollars.

Image source: oglobo

For Chinese sellers, this is a window of opportunity. The market share of home appliances, furniture, and daily necessities vacated after the fall of the Brazilian local giant happens to be a strength of the Chinese supply chain. But the window will not stay open forever—competition among platforms will only intensify, and Brazil's tax and compliance complexity is also high. Early arrangement offers first-mover advantages, but you also need to control inventory and payment collection risks, so as not to step into the pitfalls of the old giant in a new market.