Shopping malls reinvent themselves with the rise of online retail in Brazil.

(Reuters)- The evolution of e-commerce in Brazil has been slower than in other developed markets such as the United States and China, but it is already challenging companies operating in the retail segment to redesign their operations to adapt to changes in consumer behavior.

In recent years, shopping center operators have been anticipating the e-commerce movement in the country, reinforcing the offer of services and entertainment options, in addition to seeking alternatives to the loss of revenue from parking.

"Brazil even took the lead in this regard... The impact of e-commerce will be felt, but to a lesser degree than in the United States," BTG Pactual analyst Gustavo Cambauva told Reuters.

According to the president of the Brazilian Association of Shopping Centers (Abrasce), Glauco Humai, shopping malls in Brazil are more than just shopping centers and don't necessarily need to compete with e-commerce.

Instead, he believes the sector can play a central role in the development of e-commerce in the country, which still faces logistical infrastructure issues. "What makes our shopping malls a gem is their location... They would be perfect distribution centers," said Humai.

One of the consequences of the shift in consumer habits towards online shopping and the proliferation of transportation apps like Uber is the decline in activity at shopping mall parking lots, one of the revenue sources for these establishments.

Multiplan reported a 12 percent growth in parking revenue at its shopping malls in 2015, a figure that fell to a 0,5 percent decline last year. At rival Iguatemi, the figure went from an 18 percent expansion to a 4 percent increase in the same period. BRMalls, meanwhile, saw its 11 percent expansion drop to just 0,6 percent.

"In the worst-case scenario, we convert some of our 570 shopping malls into distribution centers," commented the president of Abrasce, referring to the current number of such developments in Brazil.

The strategy of viewing shopping malls as product distribution centers mirrors that of large retail chains like Via Varejo, which is building mini-warehouses in physical stores to accelerate delivery times for goods purchased online. This occurs at a time when the sector is striving to integrate online and offline channels, while competition intensifies with a potentially more intense presence of the US giant Amazon in the Brazilian market.

Earlier this year, Reuters reported that Amazon was meeting with local suppliers of electronics, perfumes and other products, as well as negotiating the lease of a warehouse in Cajamar (SP) and an agreement with the airline Azul for the delivery of goods.

"If an Amazon or an Alibaba comes along, we can negotiate for our shopping malls to become their distribution centers," Humai stated.

One of the first shopping center management companies to venture into e-commerce was BRMalls, which about three years ago introduced a pilot project at its Shopping Metrô Santa Cruz in São Paulo for deliveries from restaurants in the food court.

“We set up a delivery center that acted as a bridge between order generators and food stores... The business started to do very well and we realized it had potential,” said Vicente Avellar, operations director at BRMalls.

On May 14, the company announced a non-majority investment in the open-source platform Delivery Center to develop the so-called "ship from mall," a delivery model that will use shopping malls as distribution centers.

The plan is for all 40 BRMalls properties to be integrated into the platform by the end of 2019. The partnership is not exclusive, and the project was implemented in early July at Shopping Tijuca in Rio de Janeiro, initially focusing on food services. In addition, two other independent shopping malls and a commercial building converted by Delivery Center are already in operation.

"In just the first three months of operation, we achieved a 15 percent increase in food court sales," said Andreas Blazoudakis, president of Delivery Center and co-founder of the mobile app company Movile.

According to Blazoudakis, in addition to BRMalls, Delivery Center is still negotiating partnerships with other shopping center chains. "There's room for two or three more as shareholders," the executive stated.

Also in the sector, another company interested in entering e-commerce is Multiplan, which plans to launch an experimental version of an online sales channel, MultiShopping, by the end of this year.

"It will start at BarraShopping (in Rio de Janeiro) and then we will add new shopping malls over time... The idea is to bring the shopping experience to the customer's home," explained Armando d'Almeida Neto, Vice President of Finance and Investor Relations at Multiplan.

Also contacted by Reuters, Iguatemi said that it "is always attentive to new business opportunities," but did not say whether it was developing or studying initiatives for e-commerce.

By Gabriela Mello