FALABELLA SACI

May 2019
FALABELLA SACI

Key company facts

Falabella SACI ▪ Falabella SACI was founded in 1937 in Chile, and

has been listed on the Santiago Stock Exchange
Headquarter country: Chile since 1996. The Solary and Falabella families
Chile, Peru, Colombia, retain control of the company, along with the Del
Major country
Argentina, Brazil, Río family, after the 2004 merger of Sodimac home
involvement:
Uruguay, Mexico improvement and gardening stores.
Department stores,
▪ The company specialises in department stores and
Major channel modern grocery, home
real estate through shopping centres, along with
involvement: improvement, internet
financial services that include credit cards and
retailing
insurance. It also has home improvement and
gardening stores, hypermarkets and a strong
presence within e-commerce, as well as operations
in travel retailing.
▪ The company is seen as a leader across its
▪ Falabella’s core customers appreciate its wide various formats in Latin America, which it has
selection of private label and exclusive brands, as achieved via constant investment in logistics,
well as the benefits obtained by the store cards remodelling, and outlet and shopping centre
and credit cards associated with its financial expansion. It plans investment of USD4 billion over
services arm. The company has also become a 2017-2020, and the company has announced its
leader in e-commerce by catering to the demands entry into the Mexican market via home
of more tech-savvy customers. improvement and gardening stores, and financial
services.
Source: Wikicommons; Author, PatricioAlexanderWiki

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FALABELLA SACI
Regional close-ups
Chile
▪ Chile accounted for 61% of total
sales for Falabella SACI in 2017,
according to the holding, with
wide national coverage, which
includes 190 stores and 25
shopping centres.
▪ The company’s cross-industry
activity is the result of its
multichannel strategy, which has
been actively pursued since 2011. ▪ On a smaller scale, Falabella’s
The company is strongly
positioned through its private
label lines, and makes use of
strong price promotions, while
offering a wide product range.
▪ In recent years, the company’s
focus has been on increasing its
presence in e-commerce, gaining
recognition in the Ecommerce
Awards 2017 in tourism retailing
and online banking.
© Euromonitor International
Peru
▪ The largest international market
for the company is Peru,
accounting for 24% of total
sales in 2017, according to the
holding, with a presence in all
operating channels. Falabella
covers the whole country, with
145 stores and 13 shopping
centres.
cross-industry presence has led
to its success in Peru, with
outlet expansion, after acquiring
Saga in 1995 and Maestro in
2014.
▪ The “express store” launched in
2001 was a success in its first
year, with sales per square
metre higher than those
achieved in its stores in the
capital.
RETAILING:FALABELLA SACI
Colombia
▪ The second largest international
market for Falabella in 2017
was Colombia, with 6% of total
sales, according to the holding.
While Argentina matched this
share, the company has wider
coverage in Colombia in terms
of outlets, with 63 stores and
one shopping centre.
▪ Its original model focused on
launching large shopping
centres, including in
intermediate sized cities in the
country.
▪ In addition to offering a range of
attractive prices and benefits,
the company provides financing
for purchases through its own
financial services operations.
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FALABELLA SACI
Strategic objectives and challenges
Investment in omnichannel
▪ Falabella plans to invest USD3.9 million in Latin
America to improve logistics infrastructure, expand
its store network and enhance its omnichannel
operations. 32% of its investment will be destined
for logistics and technology, to provide a seamless
shopping experience across all its formats. To
sustain the growth of its regional operations, the
company recently opened a fully automated 47,000
sq m distribution centre in Chile.
Mexico’s expansion plan
▪ As part of the 2016 joint venture with Soriana,
Falabella opened its first home improvement and
gardening store in 2018, with an expansion plan to
open a total of 20 Sodimac outlets within five
years. Falabella has also launched a pilot scheme
in financial services through which consumers can
access credit cards at Soriana stores located in
Monterey and Mexico City.
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Expanding private label
▪ Private label brands in each of its retail formats
offer an attractive price-quality ratio. These product
alternatives also generate greater profitability and
differentiation in the market. An example is the
private label clothing line Sybilla, which has gained
recognition among consumers, resulting in the
enlargement of 13 sections of physical department
stores devoted to the brand at a regional level, as
well as four standalone stores.
Growth through acquisitions and agreements
▪ In order to strengthen its e-commerce position in
the region, Falabella acquired 100% of the regional
marketplace Linio. Falabella also announced an
agreement with Google Pay and Visa to implement
an e-wallet in Chile, setting the stage for it to
become a pioneer in e-payments in Latin America.
IKEA has also announced its entry into Latin
America (via Falabella) at some point in the
forecast period in Chile, Peru and Colombia.
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Digital strategy details

▪ Falabella’s quick omnichannel expansion has raised the bar for all
Latin American retailers. By 2019, Falabella plans to make its entire
product portfolio (from all formats) available through Linio´s
marketplace in Chile, Peru, Colombia, Argentina and Brazil.
▪ The company continues to develop an extensive social network, with
nearly 500 million followers in 2019 across its country-specific
Instagram accounts, doubling the number of followers from the
previous year. Its high content strategy on Facebook has an average
of two posts per day, and it has promotional videos in its own page’s
headers and feed. Marketing strategies incorporate regional
celebrities like the Puerto Rican singer Chayanne and international
influencers, such as Gisele Bundchen and the late Karl Lagerfeld,
who continued to work on an exclusive clothing line for Falabella in
2018.
▪ The new distribution centre in Chile is a key factor when meeting
consumer needs without compromising its service level. Innovation in
contactless mobile payments through Google Pay enhances the
customer shopping experience.
▪ Falabella SACI will continue complementing its omnichannel strategy
by creating more purchasing alternatives, such as adding to the 31
click and collect locations already operating in Chile and Peru.

Source:Falabella app.

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FALABELLA SACI

Private label overview

▪ Falabella has continued promoting and developing fast fashion under its own brands, shortening production
time, responding quickly to new fashion trends and offering the products demanded by consumers.
Consumers are also changing their mentality towards clothing consumption. Latin Americans used to frown
upon private label brands, preferring established and aspirational brands. However, the variety of products
and the price-quality ratio has resulted in private label brands overcoming these consumer perceptions.
Private label fast fashion allows companies like Falabella to react quickly to new consumer trends, and to
appeal to different socioeconomic groups. Falabella´s brand Sybilla is an example of this success. It was
initially sold exclusively in Falabella department store. In 2019, Sybilla will open its fourth store in Chile
devoted entirely to the brand. Meanwhile, within modern grocery retailing, in 2018, the global Association of
Private Label Manufacturers (PLMA), awarded its best private label pasta prize to Tottus’ “Fusilli al Huevo”.
Additionally, in household appliances, the private label brands Recco and Wuden have gained a foothold,
as has the private label Daiku within home furnishings. Overall, private label products in the mid-price
segment have been key to maintaining positive sales through a variety of options that cater to different
types of consumer.
Key Private Label Ranges in Latam in 2018
Segment Grocery Home Improvement Apparel and Fotwear
Mr Beef
Premium Basement
Ozom
Redline Sybilla
Mid-priced Tottus
Just Home Collection University Club
Casa Bonita
Economy Tottus Yamp!
Topex

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FOR FURTHER INSIGHT PLEASE CONTACT
Rocío Guzmán Franco
Senior Research Analyst
rocio.guzman@euromonitor.com

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