Magazine Luiza: How we transformed our e-commerce platform with Apigee, Firebase, and GCP

Editors note: Today’s post comes from Andre Fatala, chief technology officer at Brazilian retailer Magazine Luiza. Apigee, Firebase, and Google Cloud Platform (GCP) have helped this 60-year-old company become one of the most successful e-commerce operations in Brazil.

Founded in 1957, Magazine Luiza, or Magalu, is a technology and logistics company focused on the retail sector. In 2018 we posted 60% growth year over year in e-commerce sales, reaching 7 billion in Brazilian Real (nearly 2 billion in USD), with e-commerce contributing 35.7% of our total sales.

From supply chain issues to economic fluctuations, the retail industry in Brazil is complex to say the least. But adopting mobile e-commerce presented us with an entirely new challenge—one that we had to respond to quickly to remain competitive. Brazilian e-commerce players, along with global internet giants, threatened to make inroads into a market in which we have held a leading position for decades. To help achieve our goals, we employed Google Cloud products like the Apigee API management platform, GCP, Firebase, and G Suite.

In 2013 we had an e-commerce platform, and even a library of APIs, but those APIs were accessing an overstretched backend application built with 150,000 lines of code. Deployment of new APIs was slow, we were burdened with undesirable dependencies, and we faced scalability challenges as well as distributed responsibilities across siloed teams.

Knowing we were under threat from competitors, our then-chief operating officer (and current CEO) Frederico Trajano put me in charge of a small team of developers. The team was walled off from IT governance processes and roadblocks from the greater organization, and given the keys to the company’s entire e-commerce operations. That’s around the time when we started using the Apigee API management platform. Apigee helped us to decouple our backend systems from the front end so it was easier and faster for my team to iterate on new apps while other teams maintained our legacy systems of record.  

Our new approach accelerated mobile application development, and Firebase has played a big role in this. We started using Firebase soon after we learned about it at Google I/O in 2016. Firebase helped to reduce the complexity of building the apps that we need to reach our customers. We can quickly publish and test new features, and Firebase Crashlytics helps us keep our apps stable and users happy.

Last year, after GCP launched its region here in Brazil, we began deploying workloads onto GCP. We were pleased with the latency of GCP—there just wasn’t any. The speed was notable and this is critical in e-commerce applications. We’d already been using Kubernetes for some time as it’s especially helpful with our multi-cloud strategy. Migrating all our data onto GCP was simple because we used Kubernetes along with our own open-source PaaS.

Believing that we'd have better performance and stability to handle Black Friday traffic running on GCP, we made the decision to migrate 113 apps in less than 60 days before Black Friday. It was a move that paid off: 2018 was our biggest Black Friday ever, where we saw levels of API traffic that were dramatically higher than before. Apigee helped us with our execution, meeting customer demand throughout across our platforms, with visibility across all of our API and application activity.

As a result of these successes, we now have plans to migrate our entire e-commerce platform onto GCP, and our big data team is moving away from our Hadoop environment to an architecture that uses GCP managed services.

With this newfound ease and speed of spinning up new services and customer experiences and adjusting existing ones, everyone is able to work in small teams of five or six people that take care of segments of an application, whether it's online checkout, physical store checkout, or order management. We work much more like a software company than a retail company now.

Our approach, powered by Google Cloud technologies, supported us to expand our e-commerce strategy to third-party sellers and create a new digital marketplace. Other merchants can easily join this ecosystem via our API platform. Today, we support more than 3,300 sellers and offer 4.3 million SKUs (compared to our legacy sales and distribution system, which in 2016 supported 50,000 SKUs).

Our goal has been to transform from a traditional retail company with a digital presence to a digital platform with a physical presence and a “human touch”—and now we’re much closer to that vision. People in Brazil enjoy the convenience of ordering from their computers or smartphones, but still appreciate coming into our stores to pick up their items. In fact, two-thirds of Brazilians buy this way. To make it even easier for our customers, we built 12 in-store apps that our salespeople use to make the once-slow sales process much faster—this helped us grow physical store sales 25.8% in 2018!

Google Cloud has been a great partner for us. It’s no small feat to succeed in Brazil’s constantly evolving retail environment, but we feel like we’re on the right path.

For more on Magazine Luiza, watch the Google Cloud Next ‘19 session “How Retailers Prepare for Black Friday on Google Cloud Platform.”