Startup connects minimarket owners to suppliers and facilitates negotiations

Minimarket owners in the outskirts of São Paulo have resorted to an application to make purchases directly from suppliers — without having to leave the store or negotiate prices. Developed by the startup Mercê do Bairro, the tool is already used by almost a thousand partner markets spread across the south, east and west zones of the city of São Paulo.

In addition to the shopping platform, the company offers easy payment, management consulting and assistance in accessing credit. The focus is on establishments with up to four boxes, which represent 35% of the retail food market in Brazil, according to a survey by the Brazilian Supermarket Association.

“It got me out of my suffocation,” says Danilo da Silva Souza, 38, about the impact of Mercê do Bairro on his business. He and his wife, Valéria Campos, 38, have owned a small market in Interlagos, south of São Paulo since 2018, and have been using the integrated retail application for almost a year.​

Created by the founders of Zé Delivery and iFood, Mercê do Bairro is, at first glance, a version for neighborhood grocery stores of its partners’ previous endeavors: an application that connects small markets to large distributors, speeding up deliveries.

“We realized that the best way to start the work was to create a marketplace”, says Diego Libanio, 34, executive director of Mercê do Bairro and one of the creators of Zé Delivery. “We started with supply, with solutions that help the market to buy, manage and sell better.”

Purchases made through the app can be scheduled, arrive in one business day, and Mercê offers payment terms ranging from 7 to 28 days. “These small markets are unable to stock, they have neither physical space nor working capital for that”, says Guilherme Bonifácio, 28, operations director at Mercê do Bairro and one of the co-founders of iFood.

“It’s important to remember that this small retailer is underserved today,” says Libanio. Because they are small and fragmented, neighborhood markets often find it difficult to negotiate with wholesalers, industries and distributors — which, in turn, are unable to reach the small retailer. “If you centralize everything on one platform, and manage to provide good service, everyone wins.”

The startup’s revenue comes from commissions charged from suppliers on sales made, which range from 4% to 10%. According to Libanio, distributors pay less to Mercê than they would spend to reach this group through traditional channels. “We want to have a win-win relationship with our partners, it is important that he also benefits from being part of the network.”

In addition to integrating the entire chain into the marketplace, Mercê carries out free consultancy work for small markets, with recommendations that range from renovating the façade and organizing the store to business management and access to credit.

“When you’re working at the store, it’s a lot of rush, and things go unnoticed. I thought I had experience in the business, but when the Mercê people came here and started giving me tips, I said, ‘There are a lot of things I don’t I know,'” says Danilo.

Identified as a store with growth potential, Danilo and Valéria’s business received a proposal to become a partner establishment, incorporating the startup’s brand. A team from the company came to the site and helped sort and price the products. The store was renovated thanks to access to credit through the startup and received a new name: from Hortifruti Manancial, it was renamed Mercê dos Campos, referring to the name of Valéria’s family.

“This conversion took me out of bankruptcy. The movement was very bad, and you can see the impact that the change had on customers. Even prices were better,” says Danilo.

The businessman believes that the impact goes beyond business: in early November, he took advantage of the holiday and went to Mato Grosso to visit his mother. “You already have the purchase scheduled, it comes on automatic. I went traveling and the store ran smoothly, without any problems.”

With two and a half years of operation, Mercê do Bairro has over one hundred employees. “Our long-term vision is to create a revolution in the proximity market”, says Bonifácio.

“Just as Uber is the largest transport network without having a car, we want to make the largest network of markets without having the market,” says Libanio.

About the next steps, the two already have everything planned. “Our strategy is to be relevant where we enter. The curve we intend to make is very clear: take the entire city of São Paulo, then the surrounding cities, and then head to Rio de Janeiro and Belo Horizonte,” says Libanio.