Good morning, ladies and gentlemen. Thank you for waiting. Welcome to Magalu's conference call about the Q2 of 2020 earnings. We would like to inform you that this event is being recorded and simultaneously translated into English and all participants will be in listen only mode during the company presentation. At the end of the presentation, we will hold a Q and A session.
Questions may be asked by phone and the questions via webcast will be answered afterwards by the IR team. Now we would like to turn the floor over to Mr. Federico Cazenu, CEO of Magazenie Luiz. And Mr. Tazenu, you may proceed.
Good morning, everybody. Thank you very much for participating in our earnings conference call about the Q2 of 2020. Undoubtedly, one of the most challenging quarters not only for the CEO but for the whole team of Magalu and any CEO during this quarter faced one of the biggest challenges ever in their professional life. So, in this context, We did a wonderful job here. We did an extraordinary job in a difficult context and with a lot of insecurity, I would like to remind you that we are talking about a quarter.
Well, you know that we executives have been through some dire straits and but not at the same time a social crisis, a health crisis and the weight on our back was not only a weight in terms of guaranteeing jobs, etcetera, but it was also guaranteed the life of people because with because the threat to their health and to their life was very big. So this was an extremely challenging situation intensive job and a very strong union among all our professionals and a lot of share with our team, our professionals. And today, I am very proud and very grateful to our team. And I would like to share with you some of what we have done here. Let's go to slide number 2.
On slide number 2, in a period of so much uncertainty, the decision making process becomes even more difficult because the natural decision making processes having all the information. But with this unknown virus that could have a very big impact and with this all this uncertainty. And this decision making process has nothing to do with the protocol that we follow for decision making. And you have to have a north, you have to have a compass, you have to be able by means of these principles be able to make a quick decision. If you have a lot of mud on the road, you cannot go too fast and you cannot go too slowly either.
So you have to have the right pace, you have to make the correct decision in order to not to cause an accident. And our principles were health and safety. We do not waive this ever. And at the beginning, when we made the decision of closing 100% of our stores right at the beginning of the pandemic and closing our offices, we didn't take into account the economics and the economic impact on April. We only focused on what we thought would be best for our clients.
So we shut down our stores so that when we opened them again, we would have all the protocols in place and all the safety protocols and health protocols in place. So this is an extremely important principle and we took this very seriously over the month and all the committees involved in that. And we can celebrate today. And unfortunately, the pandemic is not under control in Brazil, but we have 35,000 people working for Magalu and we have no hospitalized employees and we already have 91% of our stores open. And we of course, we are continue to take all the necessary precautions, but we have all the protocols in place and our team is be very strict in terms of following them.
And right at the beginning of the crisis, if we took measures to preserve both cash and jobs, the company got into this pandemic with a very good amount of cash, as we said. And we decided to say, well, we are not going to lay off anybody right at the beginning. But of course, we took decisions in terms of preserving cash and we carried out negotiations with direct and indirect suppliers. And we took many measures in order to preserve cash and jobs and a very strong job done by our team. And here, I would like to talk about our concern with communities.
Right at the beginning, I announced a donation, and I will refer to this later on. But we were concerned not only with the company itself but also with our clients, with the communities around us and Magalu had to take stronger measures because this was required that is to say the moment was extremely sensitive that I see today that investors and employees but mainly our clients are recognizing our brand exiting the pandemic as one of the best brands ever to deal with this pandemic. So I'm very proud of everything that we have done and all the results obtained. And finally, the acceleration of our strategy, which is something that we promise all the time and we have a new strategic objective was to digitize Brazil and the Brazilian retailer. This is what we did.
We accelerated this and I'm going to go to Slide number 3 now. We did let's say 15 months 5 And in fact, what we did in such a short in short time, this makes us very proud and I believe in the delivery capacity of this team I have always done, but project that should be delivered in a few years' time were accelerated and the detail we reduced our salaries 70%, 80%, 30% And So we had a reduction in our compensation. So that we could I think everybody has done everything that they could do. Everybody made personal sacrifices and in spite of all that, we extended we integrated the debit card of cash as virtual debit card and with all the protocols and the logistics people were heroes. They never stopped working to guarantee all the safety protocols and increase in salaries for the team that worked so much and the partnership with National Subraiship from store was accelerated and the store pickup cash back prequalified by the VNDES for the FIDIC.
So you can see in one page that you see here on this slide, we have done so much and in such a short time, we knew that our sales would be lower that is to say the revenue would be lower and this was the Magalu team they are true heroes and they delivered all that that you can see on the slide. I'm not a superlative guy. I don't usually use superlative words but I'm using these words now and I think this is the way to illustrate what I think about our performance. GMV of $8,600,000,000 in the quarter, 49% higher year on year. And we only had 35% of our stores open on average, none in April a few in April, a few in May, a few in June.
So, 49% growth in total gross merchandise value is something really incredible and this is something extraordinary. We grew more with 65% of our stores closed than the pre pandemic and we accelerated growth. We had already grown in the Q1 and this figure is a feat that nobody can take away from us. We have to celebrate. We have to understand that something very significant has been done in a very short period of time.
And doing this and generating cash all at the same time cash is reality. Cash is what it is and we generated this cash because we grew a lot. We have a positive cash cycle in average term for suppliers that is higher and as we sold a lot, we had a very good turnover in our inventory. And with growth, this generates cash. It's similar to what Amazon has done for their whole life.
They have always grown with a sound cash generation and a positive circulating capital. And we agree with that. And I would add this issue of cash generation, the fact that we implemented Magalupa Gamentus, the whole processing of payment of our sellers got into the company, there was an influence. This generated a whole amount of cash in our assets and that will be talking about that and positive current capital and having the marketplace under our assets helped a lot as well in terms of our cash generation, but Bert will be talking about that later on. Let's go to Slide number 5, where I show you the result of the Q2.
We had the first chapter of this book, so to say, in April when we had only 8% of our stores open. They were opened at the end of the month. We had a drop of 84% in our revenue from physical stores, 138% growth in e commerce. And because of that, we did this feat. In May, we had already opened some stores.
E commerce accelerated in spite of the reopening of the stores and growing 46 percent and I had already put this in the last result of the company. And in June, the epic word is not superlative because it was epic. Many of the stores were still closed. As you can see here, the purple bar, we see e commerce growing 2 0 6%, the company growing 85% year on year. So this was a fantastic job done by the team And we were able to grow a lot, although we had a number of stores closed.
And I would like to show the performance of the physical stores on the next slide. We talk a lot about e commerce, but I would like to refer to our physical stores, an extraordinary job done by our team. It is one of the highlights, although it doesn't seem to be. And we only work with 36% of our stores open in April, 35% open in May on slide 6, okay. And 64% of stores opened in June.
With 64 80% and July 70%, today 90%. And the number I would like to mention is same store sales 25% in the Q2 vis a vis the Q2 of last year, same store sales 25%. This is an incredible figure, not even in the World Cup months, we have this kind of figure or this kind of difference year on year, but this was due to an outstanding job done by our team and all our initiatives of mobile go to the stores. We do not classify them as e commerce, so the physical stores are totally important for the company Besides contributing to the growth in our revenue, it's a cash cow. They are a cash cow in this multi channel model.
So, the return of the physical stores helped us further improve our result. And now going to Page number 7 talking about e commerce, the performance of e commerce, 182% growth was extraordinary, taking into account that we grew on a basis over a basis that was already very high and had already grown 61%, 2018 over 2017. So we grow 108% over 66% over 61% And the major highlight here is the marketplace, one of the major highlights of the company. But 1P was very good. The new categories were very good.
The app fantastic job and we celebrate this. It was 2.6 times the growth rate of the formal e commerce market according to EBIT. If you look at Macalu in the last 10 years, the physical stores grew a lot at e commerce as well. And one has never grown to the detriment of the other and we've never want one to grow to the detriment of the other. And we need to have both terminals growing and it's not taking from one pocket and putting in the other pocket.
What interests us is to grow our total gross merchandise value and what really generates results and gives and talking about results and now going to Page number 8, we have how this materialized for the first time ever in our history. We are breaking down our results per month. And in the second quarter, we have that 3 chapter results, NOK 140,000,000 in losses in April. EBITDA margin was minus 10,000,000 of course, because you maintain your whole structure. We didn't lay off anybody.
We didn't shut down forever any store and we continue to have our expenses and this generates an impact, a very high impact on our results as we had already anticipated in our material fact in April and our message from the management. So we had already told that this would happen because it would be impossible to keep the results without laying off anybody. And we didn't know how long the stores would remain open. We hope this is not recurrent, but a pandemic happens theoretically once at every 100 years. So as we started to reopen the stores in May, we already reached bake even.
This was an extraordinary feat. Gross margin, 22% to 24%, a bit 3.2% and then June, we reached a level that was even better than the pre pandemic, dollars 93,000,000 net. As you can see here, the gross margin and going back to a more normal situation. And I will tell you what we expect for the Q3, but from the viewpoint of net income and EBITDA margin will be better than the Q2. But I think it is more correct to analyze June as a basis for the 3rd quarter than April May, that wouldn't be adequate.
And for July August September, we expect a similar situation to June, exception made to the fact that we should go to 7.8 EBITDA because we need to hire people. We grew 80% in June and we didn't lay off anybody, but we hired new people and this generated the reduction in level of service, mainly in call center and we have to increase our logistics. 3P NPS dropped a little bit and we wanted to use our network to deliver for 3P. But as we had all this growth, we used all our capacity for 1P and we are hiring 2,500 new people for distribution centers and the stores that became distribution centers and make investments in the lab and also in our call centers. So this was very good for our result, but our level of service was a little bit impacted and we are going to invest in cash back.
But I will be talking about that a little bit later, but the Q3 will be significant better than the second in terms of margin, okay, and growth as well because as of June, most of our stores are open in July, I mean, and August the same. So it should be positive. Okay. So let's see what generated, what were the growth drivers and I would like to mention our strategic pillars here. Digitalizing the Brazilian retail and we have here new categories is one of the pillars and I would like to highlight the work done by the Netshoes team.
This is a company that we have always admired me even before it became part of Magalu. They have a wonderful team and we were able to grow significantly and we became leaders in sporting goods and it was a positive net income for the first time in its history and crowned by growth in sales and results. And as new category, I would like to mention the Magalu Mercador grocery. We sold 3,000,000 grocery items. We saw that we had the opportunity to grow in this area.
People didn't want to go out to shop in supermarkets, etcetera. So we have the highest number of items sold and also cosmetics at Apoca 167% sales growth on 1,000,000 active customers. Not everybody knows Apoqua, but it is a leader in perfumery and beauty articles and goods and the extension virtual or the virtual bookshelf also with a very good performance in the quarter. So this was very good. The second pillar is on the next page, on Page number 10, faster delivery.
And our focus was always having the fastest delivery in Brazil. But with the closing of the stores, 40% of everything we sold, the clients went to the stores. It was store pickup. But with the stores closed, it would be impossible. So we made a very big change and the closed stores became DCs in 700 of our stores, we started to deliver the inventory of that store directly to the consumers, so ship from store.
So, Log B and MEIs and very small carriers or shipping companies. And it helped a lot in the growth of our e commerce that is to say our logistic is extremely good and it has been improving consistently and these figures are even more significant for 1P, but you will see that in 3P, we will be focusing on that for the next few quarters. So the whole team of logistics with a very high volume and being able to really tackle the very big need and I'm very proud of that. And we launched a super app with cash back. We wanted to do this for the store public as well because our we are multichannel as you know and our Super Ret now with cash back we launched at the end of last year, but I would say that it was a pre launch and the launch was really now we brought him to make a campaign in Brazil to have this cash back campaign and this is extraordinary.
You download and it's totally integrated in our super app. From Magalupe to all the dominant apps have to have this and only with purchases we can increase the frequency. However, we need the payment so that the app is present in the first row of the client's mobile phone. After we launched the cashback, In a few weeks, we reached more than 1,000,000 activations and this is proof that the product was very well conceived and I'm going to show a video of the Super App launch just to give you an idea of how we are communicating. So now we have a video.
It was a very short video that I wanted to show you and we had many extraordinary campaigns that we launched during the crisis. We were very active in our marketing endeavors and very much focused on new categories and now Super App with Mega Lupe and Cashback and we are very active here bringing our brand to a new level. If you have any if you had any doubt about our app I think now you don't have any doubts whatsoever. In the pandemic, our brand was one of the most well recognized because of the digital footprint and the wonderful work done by our marketing team. And now I'm going to page number 12.
I'm going to talk about marketplace. 1P was great. They did a wonderful job in new categories, in the traditional categories, they were very well. But marketplace, I would like to mention 2 figures here. The growth in SKUs of 115 percent and marketplace sellers go from 8,000 to 32,000 and talking about they brought many sellers and we never waive the quality of the sellers coming on board.
And in the Brazilian e commerce, we have been talking about that quite often because some there are some platforms that have billers on board that do not issue invoices and we understand every competitor is entitled to make their own decisions, but it has to be fair play. You have to do things right. And I would never, never accept a seller participating in our platform without issuing an invoice. And in Brazil, we have this fiscal problem, we have the tax problem. And so it's not acceptable to accept a seller that does not collect taxes.
What is right is right and what is wrong is wrong. This is something that we always say here at Magalu. I do not admit that. And I think my colleagues and my competitors should not admit that because we can no longer accept tax evasion and we cannot never digitize or digitalize smuggling for instance or supplier that do not collect taxes or sellers that do not collect taxes. And many companies require this from the seller, that is to say the issue of invoices.
And so we have Magalua as a service on the next page generating BRL 3,000,000,000 and most of the total pay volume since launch. There is an important component of cash generation here. You have to have this on your balance sheet and this is what we have done and it increases the take rate and improves your margin and you have the automatic factoring of receivables for sellers and for small businesses. And the online sellers had a good performance during this crisis, during the pandemic. And here at Magalu, they can have the factory of receivables with a much better rate.
And we have been achieving fantastic rates. And this is very good for everybody because it's really a win win situation. And I would like to celebrate the fact that we have been chosen a finalist by the BNDES for FIDIC to provide credit to micro, small and medium sized companies. 80% risk BNDES, 20% as Magalu. And we will be able to help make loans to the sellers, not only factoring receivables, but also giving them these loans, which is beyond going beyond the receivables in our proposal of having a €500,000,000 and we hope to be able to do this in the 3rd or the 4th quarter, the latest.
And so this is a very good vehicle to make this happen, and we are very hopeful about that. And going to Slide 14, I would like to talk about Magalu. 80% of the sellers are already served by Magalu Intragas in the cross docking model. 800 partners still a low figure and we will be focusing on that from now on, that is say, Magalu deliveries and in order to be able to operate that and in order to give our sellers a very fast opportunity. This is a huge opportunity and we all my additional capacity that was supposed to go to sellers had to be channeled to 1P because of the situation.
And now you will see a focus on the support of logistics to do what to others what we have always done to Magalu, that is to say, have faster delivery at a lower cost. We had 19 DCs to help these sellers to deliver faster and with a lower cost. Page 15, we have done a lot of good things in the pandemic. But the really was the item that made me the most happy or the happiest. We did a fantastic job in terms of launching and all our back office people working so that this could happen and helping the physical retailers that had their stores closed sell online for the first time ever.
We're talking about 60,000, 70,000 sellers that already sell online. And the marketplace today, they address the ones that already sell online and they do not take the one that were analog. And we launched a platform to help the guys who have a physical store to become digital. And the conditions are different because it's much more difficult for them to sell online than somebody that has always been doing this. So thousands and thousands of retailers and we saved many companies, I would say.
We have many statements by sellers that they are only keeping their doors open because of the Mabaloo as a sort of pandemic. I'm going to show one video of 1 of these sellers and then you will see the impact on them, okay? So you will see and I'm very moved by that because our purpose is to generate digital inclusion and the Parceiro Magalu reflect this purpose. So let's see the video.
It really makes us feel great about it. The cool thing about this new strategic phase at Magalu is that we'll be growing by supporting others. Everything we've done so far, the IT that we deployed, the know how and knowledge that we applied and used at the company level, we want to share it via Magalua as a service with 3rd parties. And our another highlight is independent players. We have Magalu partner and we also have individuals, which was Magazini Vose, which is now under a new name.
It was an amazing job, more than 350,000 individuals are now and it's something like a direct sale over the web like Natura, Avon, totally digital now on the web. It's one of the fastest growing channel at the company. Not only did we have small companies, but also individual players to have an extra income for every sale. They are in the online store for individuals and when they sell for their friends on Facebook, Instagram, WhatsApp, email for every sale they have a commission. The checkout is our, but they have their customer acquisition.
So in addition to 10,000 sellers who are selling remotely now with mobile vendors, I have another 350,000 individuals, a big army of sellers and digital influencers who are selling Magaloo and Magaloo Partners products. And that's so cool because these individuals, Parceros, Magalu, they sell Magalu's end sellers' products. So that's about this loop of the ecosystem that we set at Magalu. And once again, we won Brazilian retail to go digital. Already We already heavily capitalized, and we raised more capital to pay debts.
And also last year, with a promise to speed up CapEx and also to work on acquisitions. We didn't do that in the first half of the year because we didn't know what the pandemic would be. But after June, we realized the business was doing fine. Cash was strong, so we resumed very strongly our negotiations and deals in order to have strategic assets to the group and fill gaps in our ecosystem and work on new categories, super app, faster delivery, exponential growth of 3P and Magalu as a service. This is all part of pillars that include acquiring Netshoes, Stunte V12 for books, sporting goods, fashion and Taino Magalu, you have it at Magalu.
And now we have more recently hub sales. We acquired this company from Franca, which is the city, birth city of Magalu, and it provides a very cool service to help the factory to be directly with the final user. They already have BRL100 million GMV process annually in Franca, 700,000 orders processed on the platform annually. So these are amazing people and they help the factory to sell directly online with no intermediaries and then consumers can pay for a lower price and the factory can have a better margin. So it's an interesting win win.
And the idea is to take hub sales to other industrial hubs. Firstly, focusing on fashion, apparel and footwear, but maybe exploring other categories as well. So we're very excited with the prospects of hub sales and all small companies like Logbee, Integra Commerce, even Softbox generated Magalu Partner, all the companies we acquired in the ecosystem, they had an amazing gain of scale. So the numbers grow a lot. Log B is nearly 50% already of Magalu and we started in Sao Paulo.
So when a good seed, a good seedling comes into the ecosystem of Magalu with his breeding ground, it turns out to be a beautiful fruitful treat to the company. So undoubtedly, this will happen to hub sales and also to another 2 very cool acquisitions that we announced only last week, CanalTech. And we also acquired in local media platform, in local media. The idea is to tap into amazing opportunities with Magaloo Ads. They have nearly all the Alibaba revenue in China and the forecast is BRL13 1,000,000,000 with Amazon coming from apps.
So we believe there is a huge potential to monetize because now with this additional 24,000,000 to our 50,000,000, we have 80,000,000. That's a potential, 80,000,000 unique visitors across all platforms, maybe a little bit less owing to overlapping, but maybe €70,000,000 is quite a significant audience with great brands that certainly we want to advertise in our digital platform. So I think it's an amazing opportunity with Magalot Payments. These are 2 major opportunities to monetize our audience, our investments. These are elements that will contribute to the company's margins in the future, not only focusing on growth, but naturally we want to monetize it in the future.
So now we have acquired the Embryo. And CanalTech, in addition to giving us advertising opportunities, I also believe a lot in having a good content to sell online. Just as you need a great seller, a talented seller, in online you need great review of products, content, videos, blogs. And CanalTech, as I see it, is the best channel at one of the best channels specializing content. I always wanted to go on this move.
And I was thrilled that these amazing founders of the company accepted to be in our team. We are so happy, 70 people and everybody absolutely amazing. And they will greatly help us improve our content on our websites and also their channels. With podcasts, blogs, zap groups, WhatsApp groups, they are very strong and very cool. So just to close these comments, I would like to highlight what everybody is saying right now.
We have some very cool actions. This is a company with social responsibility and in the pandemic, we were one of the first families, the Tragena Garcia family, we're one of the first to announce this donation. At first, BRL30 1,000,000 BRL10 1,000,000 now BRL30 1,000,000 BRL50 1,000,000 in total donated mostly to the public healthcare system and causes like violence against women. We bought a lot of ventilators and we supported many charitable hospitals in small towns. And we also donated a lot to the needy radios and TV sets.
So many good actions. We already invested RMB10 1,000,000 and now we just announced RMB40 1,000,000, 20 from the company, 20 from the family. So the pandemic is not over yet. We still need to support the public health care to fight this social inequality. And I think we have a strong role to play in this regard to do our share, supporting also small suppliers and not laying off people.
We are going to hire 2,000 people this quarter. And we announced that we are going to have solar energy in another 300 stores. So we have our functionality of a post in violence against women. It is a trending topic and a number of actions they don't fit into this slide, but the company showed it was not only concerned with the income and cash generation and earnings, but rather showing our concern with the society problems. The company is being increasingly more valued by suppliers, investors, but mostly by our customers and consumers who go to our stores and say, I bought from Magalu because it really supported during the pandemic with the right position doing the right thing.
And we see the same thing happening in social network posts. We are very proud of our team and Magalu greatly contributed for that. Now what about the forecast and outlook for the future before I turn it over to Beto? We made a point in addressing July too. I shouldn't do that, but I think that during the pandemic quarters, we try to be to provide more information to the market for better assessment.
In July, our performance is here 82% increase in total sales, 110% in stores, e commerce growing 162 percent growth even well net shoes in July full and full. So our performance is amazing for the 2nd month and I attribute that to e commerce. E commerce has come to stay. The country is more digital compared to before the pandemic. I don't think it is just a timely thing.
It happened in China. So people who bought online and had a good experience will keep on buying online. And physical stores now that we open again, performance will be better. And physical stores also help the company's profitability. So we have better prospects for the Q3 in terms of sales.
We're still going to have stronger months and also in profitability, not only just like June, like I said, part of the margin will be used to hire 2,000 people investing in cash back and the marketing cost is also going to increase a little bit more. The cost of acquisition of customer will go up in the 3rd quarter and the cost of acquisition in the 2nd quarter was low and now we have to make an extra effort for people to buy online. They'll keep on buying. I'm very confident. I believe that what explains this strong performance particularly for physical stores is the corona voucher.
I believe the government will have a soft landing by year end. And as a reminder, we're going to have Christmas bonus and Bolsa Familia. So that's an extremely efficient program, maybe one of the best measures in the world. The platform was already good in Brazil and in the U. S, you have corona voucher and you have a little check on your door.
And now everything is digital, electronic. So we do have platforms, public banks. It works fine. Maybe one of the best measures of income distribution, very effective and boosting the economy. I hope the country helps with a cap on public spending working with privatization But this measure is great for the economy and we should try to stick to it as much as possible.
I know there is an impact on public deficit, but we hope we save in the best way possible in order to maintain what supports retail as a whole. I'm not saying that people use corona voucher to buy electronics. If you think about Pulse, 80% of consumers bought staples. But if they buy food in the market, the market owner can buy a TV. So certainly, it helps a lot.
It fuels the economy with a virtuous loop and the money goes directly to consumers. So I hope the government continues with that. And if there is a hard stop, Q4 will be not so certain when it comes to physical stores. But I believe there will be a soft landing and I feel bullish about Q3 and Q4. So I'll end with our ecosystem.
We see that our ecosystem shows recent acquisitions with service, logistics, payments, customer, the seller in the middle, the seller is also my customer. And then we have all our brands pretty much spearheaded by Magaloo Super App. I think everybody, our suppliers, our teams, our customers, shareholders, all our partners. Thank you for supporting us throughout this timeframe. So it was an epic quarter.
I'm very happy with our achievements and also encouraged about the future. Thank you. I think I talked too much, but actually it was a very complex quarter to explain. And now I turn it over to Roberto Bellissimo to briefly talk about the financial highlights and then we start the Q and A. Thank you.
Thank you, Fred. Good afternoon, everyone. Thank you for joining our video conference call. Just very briefly, let me touch upon the financial highlights. A lot was said about total sales growth, e commerce growth, the growth in June and also cash generation, total sales and net cash.
So on slide 23, let me show you our working capital. We said in the last quarter that we invested in the Q1 in working capital and as sales improved, we already recovering the previous level. Inventory turnover was just amazing this quarter from one turnover that between March April was around 90 days and the current one is around 60 days between June July. I believe our inventory position, while the inventory position is virtually flat between March June around BRL4 1,000,000 and we sold much more. So it also shows the fact that our DCs are fully integrated and also multichannel would really make things easier.
And you can see as ecommerce grows. In addition to great inventory turnover, we had anticipated a lot of purchases in the Q1 with an impact on suppliers. In the second quarter, things are back to normal. We sold a lot and the same average terms of purchase, the supplier balance increased. And in June, our supplier position is higher than inventory as we usually have.
Like Fred said, a positive cycle for us when it comes to cash generation and that's a trend for the future. Another very important highlight which helps not only us to improve our working capital with more than BRL2 1,000,000,000 from March to June and another BRL1 1,000,000,000. This is also related to Magalu payments. Now we count on another one with financing which are sellers. And in Magalu payments, we have on lending to sellers, which did not anticipate their receivables yet and therefore are paid when the purchase or sale happens and also sellers deposited and Magalu pay, which is a source of funding to Magalu payments.
So we have more than BRL600 1,000,000,000 with sellers, suppliers within Magalot payments. With that, we greatly improved our working capital. And then we can show that we also improved our net cash generation from $3,800,000,000 to $5,800,000,000 in 1 quarter alone, reaching a net cash position, which is nearly the same that we had at the end of the year, which usually in retail is the best cash position considering seasonality. So for a Q2, we have a historical position, which greatly help us to lower our financial expenses. As you can see, it went down 50% from 3.4% of net revenue to 1.7% and this includes interest with leasing according to IFRS.
On the next chart, we break down our cash flow for the last 12 months. Actually here, we increased the total cash of the company from BRL2 1,000,000,000 to BRL7 point 5,000,000,000. So BRL 5,500,000,000 came from working capital, another BRL 1,000,000,000. So we have BRL2 1,000,000,000 of cash flow from operations and then we had investments, funding, interest cost and stocks with buyback. So the total BRL7.5 billion cash and our greatest cash position in the history of the company.
So our balance sheet is very solid. And on the next slide, Slide 25, we show that cash generation was not only this quarter or the last 12 months, we can show that we've been generating a lot of cash increasingly and consistently for more than 3 years. And at the same time, our sales are growing at a very fast level. We firmly believe we are a unique model combining both patterns, strong cash generation and strong growth. Just to close the highlights, Luisa Credit, another very positive highlight in our earnings.
The Luisa Card Base shrunk a little 5,000,000 cards because our stores were closed. So the issue of cards went down. We expect to gradually come back as we open our stores again and as the economy takes over again. On the other hand, revenues from our cards, we have a lot of market share gain. The whole market of cards shrunk owing to social distancing and our customers' expenses in Magalu decreased because our stores were closed, but outside Magalu by and large the numbers were up gaining market share and mitigating the impact of the crisis on Luisa Cred's revenues.
But the main highlight for Luisa Credi has to do with receivables. Like we said before, in April, we started below our expectations, particularly to the stores that were closed and in May it was slightly better as we opened some stores. And in June, we had a level equivalent or slightly above the crisis and in July way above the level before the crisis. So our receivables have been just amazing and they sped up as we open more stores and also the efforts of our store teams. And they had an outstanding job welcoming our customers.
So we managed to improve our receivables in the portfolio. And the short term overdue portfolio, so it takes a lot of provisions usually. And as we improve the short term portfolio, we manage to have lower provisions compared to last year. The NPL over 90 days increased a little. It has to do with the pandemic and also with a temporary shutdown of stores.
But a short term NPL more than offset the long term NPL. And overall speaking, we managed to maintain the level of total provisions with Louisa Care between 1,600,000 and 1,700,000 with a coverage index greater than 160%. We said before that Luisa Cred's result had an upward trend since the Q2 of last year. It was already better compared to the first half of last year And it was the same trend for the current half year. Last year, we were growing very highly, very or many new customers.
So we were making up a lot of provisions in IFRS way above our BR GAAP needs. And now the trend has reversed. And Luisa Credi is being profitable, BRL 25,000,000 profit in the second quarter and BRL35 1,000,000 in the first half of the year, way below last year. So it was another highlight of our earnings. And the behavior was similar to Magaluz.
It was increasing over the quarter and also continued to improve over June July. So we are in a very good path with Louis Agred. So with that, we close our financial highlights, our presentation. And now we'll be happy to take your questions during the Q and A. Thank you very much.
I would just like to highlight that all the managers are here, the executives and I thank the Board of Directors of the company will work very close to one another with our committees, the Board and governance was great during the pandemic in terms of funding, investments, decisions made and everybody supported one another. The board members also supported us a lot and I would just like to acknowledge that and open the floor for questions now. Ladies and gentlemen, we will be starting now the question and answer session. The first question is from Thiago Macros with Itau. Hello, everyone.
Good afternoon. First of all, congratulations on this quarter that was just outstanding. My first question is about Magalupe. I would like to understand your positioning. Does it make sense to assume that part of the strategy is focusing not only on end consumers, but also in Arjun?
And is it right that you'll be addressing to make it happen? And along the same lines, what is your view about the impact? In Magalupay? Does it make sense to believe that PIX can be a watershed in the friction of the manning of digital platforms? These are my questions.
Thank you. Thiago, thank you for your questions. I'll try to make some comments without disclosing more than I should. So our view is system base. Remember the slide I showed you at the end?
Everything we do here in terms of products, what I mean by products is apps and software, we want to connect the ecosystem. Obviously, we really would like to extend Magalupay to all sellers that already use Magalupayments. Today, it is not a corporate account, it is an individual account. But because I just want to have an integrated systemic ecosystem, even if I want to hide it from anyone, it won't be possible because we will get there somehow. So this is part of our strategy.
And we had almost like an M and A Robson Hubs who is now with Fatale's team and is one of the greatest experts on digital payment products maybe the greatest export. It took me 3 years to convince Robson to be with us. So I'm very happy he joined us. He knows a lot about products, financial systems, every bit bite. So we are absolutely excited and interested.
And my view about PIX, I think it levels the playing field. It arrived a little bit late when it comes to the big banks, but PIX is going to level payments for everyone. It will be a breakthrough in payments, particularly when it comes to debit payments, bank slips and maybe in the future even with credit. So I see as a great opportunity for us because it levels the playing field and gives a lot chance to Magalupe to be on equal footing with the wallets already established and also with more conventional payment systems in the market. So we'll level the playing field.
Like I said before, it's a white page and we are ready to become relevant and I'm very excited with Pits. Andre Fertala, our CTO is here. Fertala, would you like to add anything? It's along the same lines. Pyx is really facilitating payments.
Maybe we can see the payment slips debt because it does have an impact on e commerce. And finally convenience with cashing inside the account fix is going to make it easier to have the cashing process. However, I don't see how we can abandon what we are doing with a native integration with banks. Maybe we can tap into that in the future as well. Thank you for your answers.
If I may, Fatala, could you make more comments to us about your plan to open the platform? That was a topic discussed in the follow on time. I know we've been working on that consistently. Could you give us an update? What is the status?
Is it still part of your strategy? That's my last question. Thank you. Do you think it's feasible? Thank you for the question Thiago.
The answer is yes. Since the follow on, we mentioned this thing about the open platform and this year we are working on this and we built many things in Magalu in order to have multi organizations like we said last year. And you already have some in house initiatives given evidence that it works with our engineering teams within Magalu. And once we have maturity in house, it will be helpful to open up to the world having an open platform. Thank you, folks.
Thank you for your answers. The next question will be in English and comes from Mr. Andrew with Morgan Stanley.
Hi, thanks very much for the question and congratulations on the quarter. My question here is on categories and the expansion and any update on how important acquisitions are to growth here? You've had success with Netshoes and Epoca. So how do you think about expanding the category base and the next categories that could be in focus here for acquisition and integration? Thank you.
Drew, thank you for your question. I believe acquisitions are extremely important to us. We have 3 big acquisitions when it comes to category development. We had Epoca for Health and Beauty, net shoes with sporting goods with an option of Zatini, which is for fashion and apparel and it was great. Zartini run rate is around 1 €1,000,000,000 annually, one of the big players in apparel and fashion.
And now more recently for books, we have Estenci Virtuao, which is one of the greatest book marketplaces in Brazil. So we can pinpoint some important categories to us. Everything about CPD, foods and grocery items, We don't have any acquisition yet in this area, but that's an important category. So anyway, we are also getting to agribusiness now selling agricultural inputs to small farms. And also we had a launch via marketplace.
For fashion, Zatini, ZAR1 1,000,000,000 is still little. So we have all categories and we'll be growing organically. And if there are any future assets down the road like is to give it to our or Epoca or even omni channel asset, we'll keep our eyes open doing the maths obviously. Because managers are also portfolio managers, we need to work on a good asset allocation. We have to know where to invest.
So we try to do that very diligently without losing sight and track of opportunities. But certainly, this is on our radar and even traditional categories, if it makes sense, we'll keep an eye on those. The next question is from Thiago with Goldman Sachs. Hi, Fred, Beto, team. Congratulations on the results.
We have two questions. The first question is about frequency. Can you give us more information about average purchase frequency in our base? And how many categories by consumer and which categories and the number of customers this quarter? And secondly, about the grocery category, you mentioned M and A as a possible avenue for growth in this category.
How do you envisage this growth? Do you believe the main strategic focus is via 1P or 3P? How do you consider opportunities down the road? These are my questions. Thank you.
Thiago, thank you for your question. I just wanted to have a big agenda. We have 5 pillars. We want to be 1 stop shop. Maybe they can include many, including grocery stores, but not exclusively.
No bias here. We have physical stores, online, omnichannel, marketplace. I think we can do these three things well. So I have no preference when it comes to make a decision about assets. What makes sense is to have a rationale behind it.
So once we believe we can work on the base and from this base we can develop the category then we'll grab it no matter what kind it is without a lot of specification we can work on 3 channels, 1P, 3P and physical stores. We know them all. So naturally not so much with new categories that's why we bring acquisitions. We know what we don't know. We are humble enough to know that for instance I don't know anything about this And I think we were successful and I think we were successful.
The same thing happened with EV, Epoca and with other moves in these categories. I just wanted to make clear that when we go for an acquisition, we keep the three things in mind. First, we have financial due diligence, which is critical. Then we have a technical due diligence. Check-in the whole due diligence.
So if you want to buy asset and IT is very poor, we don't go in. We don't want to waste time with a good or bad legacy system, which is heavy. Technology is important. And finally, a cultural due diligence. The team is going to be part of our team.
We don't want to lay off people. We want to add people to our core. So it's like hiring, you have to know whether those people really share the same values, the same culture. All the companies we acquired, the teams were integrated. We already play in the same game with confidence.
So I go deep into that. And this team seems to be here ever since our inception. As for frequency, it increased a little, but we still have a long way to go. We come from a low frequency retail and our challenge, if you think about the future, categories contributed, Nat Shoes had a great performance too, but we still have a long way to go, a big challenge to our team. We are far from being happy with the current increase.
It happened, but far from what we really want. Think about Alibaba, like I said before, 90 purchases or acquisitions per year, Amazon 50. And including ourselves, in Brazil, we are under 10. So we have a lot to evolve, tough job, great challenge, but I trust and I'm confident with this team to address it. Perfect Fred.
Thank you. Just one last question. You mentioned on our talk about formal invoice. What about taxes? What about negotiations and discussions about a new tax rate for the digital invoicing.
There are two points here. The rate for digital operations, which includes a reduction in payroll costs. So it doesn't change that much to us. We pay everything and the sellers do that too. The administration say that they're not going to increase the tax burden.
So I have no restriction yet. We have 35,000 people. So if the offset is a reduction in the payroll, it might even be a benefit or equivalent to us or not so bad. Now there is another measure in Congress, which is peace and coffins demanding marketplaces or the seller or the marketplace to oblige the seller to have the tax collection. It is not a digital tax, but that's a requirement provided for in this measure submitted to Congress.
I'm absolutely in favor because some marketplaces have a loyal attitudes and the bulk of the base has a take rate in sales without tax collection. But I don't do that. I think this is not the right thing. It's not unlawful. I'm not saying competitors are illegal, but their sellers are illegal.
And we have to avoid that. Many marketplaces doing that, not one specifically. We want to prevent this from happening. Every marketplace that doesn't require the seller to invoice in my opinion is to contribute is contributing to tax evasion in Brazil. Thank you, Fred.
Mrs. Eugenio from JPMorgan. Hi, Fred, Bert, thank you for the call. It was very clarifying. I have 2 questions, if you allow me.
Expansion plan. Will there be any change in your plan to expand physical stores from now on? And the second question has to do with the Magalu platform. Where will your focus be? Logistics, FinTech, you said that you have to improve the service level, something that happened now in the Q2 that you want to improve again or improve back.
So where will your focus be? Thank you very much, Eugenia, for your question. About the physical stores, because of the pandemic, we have to postpone the opening of new stores. We were opening 150 stores every year up to now. Unfortunately, we lost, so to say, the first half of the year for that.
And this has become more difficult, but we have already resumed this. And we are carrying out the whole selection and training of the people, the store people online. And we do have some images if you want to see. And it's very great and very warm so to say and I'm going to call one of our officers to talk about that. And we're doing online training for the new team and with a very big warmth, I would say.
And we are going back on this. Of course, we are not going to open 150. We have already opened the kiosk of Los Amaris in Rio and we are very enthusiastic about the opening of new stores and we have a very big confidence on our model. Fabrice, would you like to say anything about that? [SPEAKER STEPHANIE ROBERTO DA CUNHA CASTELLO BRANCO:] Hello, everybody.
Yes, I think you have said it all. We have already lost 6 months this year practically. And we were going to get into new markets and we have maintained Brasilia the day after tomorrow. This is a very strong market. We should be closing the year with 100 or over 200 kiosks of and we have already been already opened in Rio and now in Bahia and in Brazil with kiosk and then stores and next year, we are going to further accelerate this.
So for next year, we will surely keep on track our intention of opening new stores. Thank you. [SPEAKER CARLOS GOMES DA SILVA:] Hello, everybody. Congratulations for the result that you have obtained, surprising results, in fact, very positive surprise. And my question is a little bit more on the technical side, Thinking about the speed of delivery, you mentioned one of the highlights in your result and part of that, I think, has to do with the transformation of the stores and faster categories put in the stores as you grow at the speed that you are growing.
Everything becomes very big and it's very difficult for you to keep all this inventory inside the stores. So what about this situation? Do you have to open dark stores without any retail? What about your logistic expansion taking this into account? Well, opening more stores and out of the more stores frequency we have.
So you can have traffic of people and not only inventory. And I'm very comfortable. We believe that we are going to extend and increase the number of assets, more technology, more intelligence involved. So we are not concerned with, let's say, a ceiling of capacity. Thank you.
Thank you for the question.
Next question is from Mr. Richard with Bradesco. Good afternoon, everyone. Congratulations on the earnings. Brad, I have two questions.
The first question is about the role of the stores. During the pandemic, it was clear the important role of the stores. Did you start renting them as dark stores while they were already closed? My question is about what will happen after the pandemic? Do you have enough room to have the stores and use them as dark stores and at the same time start working with Netshoes products and sellers in 3P?
The second question is about Netshoes. Both Netshoes and Zatini had a very strong quarter. I just want to understand if it was a natural move owing to the pandemic or if you're beginning to be more aggressive in terms of marketing and advertising for these 2 websites? Thank you. Richard, I guess the same question was answered in the previous question.
I cannot disclose too much because it has to do with our store strategy. So please allow me not to be so clear and be more evasive in my answer. But I can say that I feel comfortable with that. We have a vision about what to do without hitting a capacity cap or any significant physical asset. I'm not speaking of mini hubs.
We used to say mini DCs. So we have an idea about what to do that in the future. So that's the vision we have right now. And unfortunately, I cannot share more details on this. Answering the question about Netshoes, I think I'll turn it over to Eduardo and then Marcio.
I think they have more to say. Richard, thank you for your question. With regards to net shoes, overall speaking, that's a category that in the beginning of the pandemic, we were concerned about it because in many countries there was a decrease, a big decrease with specific footwear and apparel categories. What we managed to see here starting late April early May was a stronger growth in sales, both in Nat Shoes, but in Nat Shoes specifically suffering with the soccer and football category because it was idle, there was a heavy impact. But all the other categories like equipment for having a gym at home or running shoes, it was doing fine.
And at Zatini, we also notice a more significant increase compared to what we had before the pandemic. But overall speaking, it was very sustainable. In that shoes, we're still trying to resume growth and go for a breakeven point. And that's why we don't have a lot of room for big investments. We don't have big investments in margin or marketing.
It didn't go down. Actually, margins increased a little. And the breakeven point, there is an operational leverage because we increase the sale and also capture of synergies because now most of the back office is already integrated. The last part was the SAP. We had the migration to Magazini Luiza and the whole back office is fully integrated now.
So for the future, we do have the opportunity once we have a more structured and solid base in the results. There is opportunity to go for further investment and increase even faster and stronger with Natchez. Marcio, anything to add? Good afternoon, everyone. Just adding to Edu's comments.
Please bear in mind that Netshoes more specifically was growing when it comes to the recovery of several brands and franchises. So Fred was involved in meetings, top to top, bringing big brands and recovering products that Netshoes had stopped selling over time. And finally, making marketplace stronger as a tool. When we include marketplace in the projection, it hit more than 40% of sales in this timeframe. And once again, highlighting brands, products we didn't have before and products at the top of the pyramid and in Zatini brand diversity.
We are bringing more products using the whole Magaluz capacity including the balance sheet. So these brands are increasing naturally improving their frequency, penetration and synergies like Eduardo said, store pickup. So we have a sustainable growth and like Fredericos said, reaching the net or the first net income of the history of Netshoes specifically in July and working with a sustainable growth in the team so we can raise the bar even higher and be in the journey. It's important to remember that Magalu's products already being sold at Natchew's and Natchew's products sold at Magalu as well. Nets and Zatinis, so all this synergy was captured over this 1st year of work.
We're very happy, a very strong team and we'll move forward along the same lines. Thank you. Thank you, Marcio, Eduardo and Fred. Thank you.
Hi, Fred, Bethune and team. I had a question on Magalu as a service. You did some really interesting acquisitions in the last few weeks. The question I have is, when you work with the smaller merchants on adding different services, is the idea ultimately to sell directly to the consumer or through Magaloo's marketplace or both? I just wanted to check what your longer term vision for helping the smaller merchants is.
And the second one is on the payments part of it, where does it now make sense for you to start looking at an acquiring business or a sub acquiring business given the size that you're going to be doing in processing payments and factoring, etcetera? Thank you.
Thank you very much for the question. Regarding Parcero Magalu, which is the platform that we launched for the small retailer, the retailer had both options. It was born totally linked to Magalu and this is valuable for him because we are talking about over 30,000,000 users of the app, 55,000,000 in the digital platforms. So showing or showcasing the product for 55,000,000 clients is a great way for them to bring new clients to their own platforms. However, they have the option of using the platform in order to reach their own clients.
So it's one of the functionalities. So he can say directly. So these are functionalities that we are going to streamline as time goes by. But I believe that the bulk of the sales that these sellers will have will be coming from our millions and millions of clients. But they will be able to sell directly to their probably with a take rate that will be different from this one.
But we want to give him the possibility of both things. We want to give him the option of selling directly. And I would like to remind you that everybody that sells through the platform, Magalup Pagamentos is already built in as under acquirers. We are there at the platform of these 1,000 that have come on board and they are already part of Magalupa Gamento's. Mr.
Vicker from Credit Suisse. Good morning, everybody. Thank you for the question. I had some glitch here in the communication. I have a few questions.
I have the impression that the situation of the retailer that is dedicated to physical retail. The life became more difficult over the pandemic. So how do you see the situation of this retailer that is your competitor? And how could this help you in accelerating same store sales? And the second point is the following.
Going back to M and A, the company was very much focused on building the platform and having online M and A, and you did an excellent job in this regard. But at the same time, Fred said that you're looking at everything. So you're considering physical retail as well. As you're looking at new categories, would it make sense to see Magazini doing M and As in other segments of the market and physical retail and also the physical stores of Netshoes? The third question.
Thank you for the questions. I think you have a whole series of questions here. I don't know whether I will remember all your questions. Beth, you help me if I forget one. Well, competitor is in the physical retail.
Okay. Undoubtedly, in all crisis, you have a natural selection. You have weaker companies that are less capitalized, and they have a feel the negative impact more than the others. And one of the major players of electronics, they are under judicial recovery, Ricardo Letro, a very big player and some others have already left the business for the same reasons. So there are very big opportunities and there are others who are not under judicial recovery, but they are also facing, let's say, dire straits and but they can still gain market share.
And I see this as an opportunity and Fabrice's team is going to tap into these opportunities in the post pandemic world. In a normal situation of every post crisis. We cannot say everything that we are going to do, what we are not going to do, but I don't want you to be surprised. When you are an ecosystem, the scope of the company that you can acquire is very big. For instance, you take Amazon controlling a robot company and then CD, diapers.com and Whole Foods, which is physical, probably 50, 60 or even more acquisitions.
Alibaba, likewise, they made many, many acquisitions. So the spectrum is very broad. When you have a view that is as encompassing as ours, but it's not every part that fits into the puzzle. You can have all kinds of pieces and all format, but if they do fit the puzzle, then we bring this company on board. Let's say we buy any kind of company, okay.
But the only thing I want to say is don't be surprised about net shoes. We are not going to say anything about it exactly for the same reason. We cannot just open everything to you.
Next question is from Daniela with 11. Good afternoon, everyone. I would just like to congratulate you all on the decision to open a summarized P and L with the numbers for the Q2. I would like to say that we don't cover only retail companies, but of the 150 companies we checked, the only company that gave such a visibility to the quarter was Magaluz. So I really congratulate you all.
It really helped us to understand how the quarter unfolded. Now getting to my first question, I was really amazed with the improved logistics network. I think it was very important to support the quarter's performance and it's absolutely critical for the future. If you look at the map that we showed on Slide number 10 about Log B's expansion, what I'd like to understand if it was only Log B or if there was some third parties of last mile services to some of the players. And if for the future you intend to continue outsourcing or if you'd rather do everything in house?
So how much do you still have to do to improve efficiency? And then I'll have another question for Roberto. Denis, thank you for your question and your comments about the way we disclosed the earnings. We thought it was important to make it easier for you and investors such a complex quarter. We don't like to disclose so much, but it was necessary at this time.
At the end of the day, we disclose a lot of things about 1 month with online results from stores, a lot of information that we don't usually disclose. But we made that decision just to make it easier for you to do the job. As for expansion, nearly everything was Log B. We had a strong expansion in Log B accounting for half of our courier system, which is huge. So Luisa Network was not courier and Log B, it was its year, Log B year.
It really grew and had a lot of proportion. It was an important exemption because without store pickup, we needed a last mile service for our end users. It was a great job by Log B and Labs. They work on the systems to make it happen. Log B had its own TP and now we use the stores at TP and it brings or it entails store integration and everything happened along the process.
The growth in Magaluz volume is so huge that we have to be a little agnostic here. Naturally we want to have our network. We know there is an opportunity in Brazil to have our own network, but we still have to count on the post office partners as carrier companies. I'd like to have both in the mix, our own important footprint and work with partners and be supported. We shouldn't forget our partners that are important and significant and in some locations they are better than our own network.
So we have to be a little bit agnostic here. Having said that, we keep on investing in our own network because that's a competitive edge. But we can always use 3rd parties. It's not something ideologically radical. Crystal clear.
Thank you. And Roberto, could you tell us more about provisions at Luisa Credi? We've seen many banks this quarter strengthening their positions based on over 90 mostly. And I realize, well, I believe you were more conservative. Based on your comment, it seems to me that you think it is adequate, But it drew my eye because not only banks, but also Carrefour, for instance, everybody was more aggressive or conservative, I don't know how you want to call it.
So the question Roberto is the following. You said that receivables were greatly improved in July. But what about over 90? Do you also feel comfortable without the need to strengthen Louisa Cred's provision in Q3? Because Louisa Cred follows M and A.
So I'm anticipating in order not to have the same kind of mistake in Q3. Thank you, Danny. Great question. Let me explain both. Let me talk about Luisa SAG as well, but starting with Luisa Credi.
In reality, the whole accountability, accounting treasury Luisa credit processing is performed by Itau Bank. So that's the bank's model. And the calculation of the need for provision, everything is based on Itau Bank's model. So we have no control or management over these calculations and dynamics. Obviously, we follow the approval rate, concession, granting important operational decisions daily and monthly followed.
However, what I said is that receivables were really amazing compared to the beginning of the pandemic. In March, we already had an increase in provisions. The result of the Q1 was slightly lower, already owing to an increase in provisions. But then in April, the stores were closed, receivables went down, But then we started opening the stores again and we made we focused our efforts on receivables. And it was different, unique in the market, I would say.
In June, we managed to go back to receivables equivalent or even higher than in the pandemic and in July, definitely higher than prior to the pandemic. And if you check the final or total receivables balance, it was stable at 1.6 or 1.7 percent and the total portfolio was also flat and over 90 percent it was slightly increased, but it is already provisioned. The coverage ratio is 160%. So on top of the portfolio over 90 days in this $600,000,000 or $700,000,000 provisions in addition to over 90 portfolio, the purpose is to cover the losses in short term or the current portfolio and they are at a level that is better than prior to the crisis. So we have a very positive trend.
July continues with the same high provision rate, provisions lower compared to last year and very much related to our efforts on receivables. Our efficiency ratio at Luisa Creggi was also very good. We also managed to lower our expenses dramatically, 40% was our efficiency rate, which is one of the benchmarks. And now we want to go back with our numbers and the number of cards Louisa Kreds take in our business as our sales go up and our stores well, most of our stores are already open and we are very confident delinquency completely under control, so we are very confident with Luisa Credi's result and the results for the mid- to long run. Now about Luisa SAG, what happened was that we have a pro rata approach and because the stores were closed, we sold fewer insurance and we had lower selling expenses related to insurance.
And that's why we had this one off effect. And as sales go up again, commission expenses and insurance expenses will come back to, but we had this benefit this quarter of having a lower level of expenses. Got it now. And if I may, a third question, a followed up question on your second comment about Luisa Credi. Something that drew my attention was the fact that you managed to maintain a growth of 25% in fee income of service expense and you associated to Magalupe and marketplace expenses.
Do you believe that in the future now that the stores are open, this line may perform even better? It was around 5% of sales. So even though stores were closed, you managed to maintain this contribution in total sales. So it really drew my attention because we know that services have a very good margin. Absolutely, Daniela.
That's for retail, right? Actually, we always had more service revenues in physical stores and less in e commerce. This quarter in physical stores actually the fee income or service revenue went down, but they were offset by the increase in e commerce marketplace and particularly Magalu payments. And for the future, we have an upward positive trend. Stores going back to normal and marketplace growing and Magaloo payments growing even more.
Sellers anticipating receivables automatically even higher. So chances are service revenues will be positive as well, Denis. Thank you. Congratulations again for your results. Thank you.
Mr. Robert, Bank of America. Good afternoon, everybody. Congratulations. Could you talk about the improvements in the shipping terms, that is to save the time?
And how do you intend to leverage this to the 3P? And what would be the situation of a faster delivery to the marketplace for the marketplace? Well, the focus of our logistics is to deliver faster and at the same time increasing the number of deliveries of Edwin and his team and part of Lando's team as well. They want to reduce the time of delivery and then they will have to find a way to do more volume for 3P. And this is where the focus is, Bob.
This is and I cannot talk any more about that because of strategic reasons, but you can track this number because you will see the results, deliver faster and deliver more for 3P. What about your dynamic in July August now that you have opened the stores? And what about click and collect and other formats that were more relevant before the pandemic? It would be great if you could give us some color. The sound was very bad.
The interpreter apologizes. Thank you for the question Gabriela. We have not published the figure for August specifically. But July was very important, very high growth rate and this is the same trend for the end of the year. In August, we have even more 95% of those stores are open and the trend of e commerce is of an accelerated growth and we accelerated and we changed the level.
So we are tapping into this opportunity. So the trend is very positive. I cannot tell you specifically about any figures, but we are very happy with what we are doing over August as well. Was there another question? You were asking something else about August.
During the Q2, we almost had nothing of this modality, which was very relevant for us in terms of faster delivery and freight costs or shipping costs And it ended up affecting the level of expenses in the second quarter. But as stores were being reopened and we had confidence that the stores would not be closed again, then we reactivated the store pickup modality and it is growing consistently. And very soon, it will go back to the levels of the pre pandemic levels about 35%, 40% of our online sales. And adding now the shipping from store, which is quick and cheap. So in this case, going to the client's home, so the return of the store pickup plus the ship from store, all this improves our cost and the quality of our delivery.
And this will once again be a competitive advantage of us in the second half of the year.
This concludes the Q and A session. I would like to give the floor now to Mr. Federico Tragiano for the final remarks. Mr. Tragena, you have the floor.
Once again, I would like to thank you all for joining our conference call. Special thanks to the whole Magalu team, including the Board of Directors. Thank you very much.