MEXICO CITY  Dafiti, a fashion-focused online retailer operating in Brazil, Colombia, Chile and Argentina, intends to grow revenues by 30 percent to about 725 million euros, or $887 million at current exchange, as it embarks on logistics and brand expansions.

With 7.3 million customers and 675,000 stockkeeping units, Dafiti is benefiting from soaring online retail demand in South America, brought on by the coronavirus pandemic, chief executive officer Camilo Rueda told WWD. This, coupled with plans to add a string of new international and local fashion labels and investments to boost logistics and streamline customer service, should help the merchant grow this year and in 2021. Dafiti is part of the Global Fashion Group, which runs online merchants in the emerging markets and is headquartered in Luxembourg.

“There’s been a huge acceleration of e-commerce in South America, more than in any other region, as penetration has been lagging,” Rueda said, adding that Dafiti saw revenues climb 50 percent in the third quarter, putting it ahead of other GFG sites including La Moda in Russia, Zalora in Southeast Asia and The Iconic in Australia and accounting for about one third of group revenues.

Dafiti’s expansion comes as much bigger rivals Amazon, Falabella and Mercado Libre are also rushing to expand in Latin America, investing millions to bolster logistics, expand their product offering and roll out their own vehicle fleets and airplanes to speed delivery. Mercado Libre has even launched its own digital bank, Mercado Pago, offering its online customers low-interest loans or credit cards — or steep discounts and/or free merchandise delivery.

Dafiti has not gone that far but it is moving to increase its warehouse capacity and introduce new brands to set itself apart from Chile’s Falabella, its biggest competitor in the fashion business.

“Logistics has been a big deal this year,” said Rueda. “We inaugurated three new warehouses in Bogotá, Buenos Aires and a huge one outside São Paulo, which is the biggest automated warehouse for fashion, with 100,000 square feet.”

The Brazilian site is gradually ramping up to handle 5 million items, compared to 1.5 million items for facilities in Colombia, where Rueda is located.

Dafiti is working to bring new international brands to its fold after adding Lacoste, Gap and Polo Ralph Lauren this year, said Rueda, adding that Gap has sold very strongly, becoming a “home run and one of our top 10 brands.” The firm has also added a host of local fashion labels in Colombia, including Arturo Calle, who achieved fame as a purveyor of men’s suits but has expanded to sell broad apparel including kidswear, a category that’s growing rapidly in Dafiti’s marketplaces, according to Rueda.

Dafiti recently added top shoe brands such as Nike, Adidas and Skechers, notably in Chile, the executive said.

Also coming to the fore is the possibility of adding H&M and Inditex labels such as Zara, Bershka and Pull & Bear in coming months. GFG recently brought these labels to the Philippines and Russia. “We started working with them in October and it has been very exciting,” said Rueda, adding that the goal is to eventually bring them to Dafiti.

Dafiti hopes to carve a niche for itself by combining exclusive global brands with local labels and developing strong direct relationships, all while targeting a younger audience than Falabella, which has a much broader network.

“We recently launched Dafiti District to give local designers in Medellín, which is a great fashion and design hub, a chance” to sell their products, Rueda said.

The grassroots effort seeks to promote young talent and not necessarily established Colombian designers. Rueda expects Dafiti District to also roll out in Chile, Brazil and Argentina to attract its target of young consumers ages 18 to 30.

Rueda claimed Dafiti is the only fashion-centric e-tailer in all of its operating countries except Brazil, where it has direct competition from Netshoes and smaller outlets such as Shop2gether.

Not to be outdone by Mercado Libre — whose sales are forecast to surge 46.5 percent to $20.5 billion this year — Dafiti is introducing its own motorcycle fleet for same-day delivery. The firm provides free delivery with a minimum $40 purchase. It is also introducing an Amazon Prime-like service to waive delivery charges for premium customers. Rueda claims the merchant picks up returns from customers’ homes as an extra service that rivals lack.

The retailer added millions of customers in recent months, with the count surging to 7.3 million in the third quarter. But competition is intensifying, not just from Mercado Libre but also from Amazon, which just inaugurated three new warehouses in Brazil, boosting its total to eight and reportedly creating 1,500 jobs. The company can now ship goods to its Prime customers in over 500 cities, compared to 400 before.

Magazine Luiza, Riachuelo and Lojas Renner are also rushing to boost online offerings and, like Mercado Libre, are scrambling to add banking and credit services for customers.