Welcome to Magalu's First Quarter of 2020 Earnings Conference Call. We would like to inform you that this event is being recorded and simultaneously translated, and all participants will be in listen only mode during the company presentation. At the end, we will hold a question- and- answer session when further instructions will be given. Now we would like to turn the floor over to Mr. Frederico Trajano, CEO of Magazine Luiza. You may proceed.
Good morning. Thank you very much for participating in this call. It's a very non-typical situation in this call because we arrived in the middle of a pandemic internationally and in a very sensitive situation in Brazil.
We are holding our call one month after our original disclosure of our results, but it took us some time to give you a better preparation with more concrete information and a more clear view of our situation. As you can see, we have a different format for this call. In fact, it is a webcast, not a conference call. There are some advantages because the audiovisual resources are better, and we are going to show you videos. As usual, it is another differentiated manner because we are holding this remotely, so all our executives are present, each one in their own homes or their own home offices. They are available should we have the necessary time. They are all available to answer any questions that you might have.
Once again, we would like to thank you all very much for participating and for your interest in our company. The first thing that I would like to mention, and I'm going to the presentation already. Magalu is a company that since the beginning of March, we already started to take these things very seriously. Up to February, our view of the pandemic was limited to the supply of our chain up to February, but after March, after the carnival, we understood that this was going to be a serious situation here in Brazil, such as was already the case in Europe. We had to tackle the situation very seriously. We canceled a meeting for 3,000 people that we were going to hold in Campinas. Everything already paid for, and we had to cancel it, and we were very much worried about the situation already.
We started to organize home office right at the beginning of the second part of March. We took the decision of closing the stores, and the company took it very seriously, trying to adapt as quickly as possible to this new reality. We set a new management model, digital crisis management. We created 12 committees for strategic fronts because we said, "Well, if we do have a lockdown and social isolation, should this come here, and should this be extended, what should we do?" I have a video that I usually show, and I say, "Well, if you sail, this has nothing to do with the wind It has to do with the person who is in the boat, and you can even go against the wind if you adjust your sails."
You have to take the whole crew, and you have to have a very good reading of the situation. You're right in the middle of the storm, and you have to adjust the sails. This is what we did. We took our crew, so to say, and the crew that I have on my boat is outstanding. Exceptional people who share our culture. They are totally committed to the business, to the company, and they are very talented, and they have the, I would say, a very special kind of knowledge to deal with this specific storm, so to say. The digital part is very important for this type of crossing.
These committees have their objective, they have targets, and they are all strategic, and they are transformational. We made very quickly the necessary adjustments, and we tracked a very well-defined accountability of the leaders and very fast decision-making process. Of course, we had, first of all, to preserve our cash and human lives. I say that between the middle of March and the full month of April, this reorganization of the company's management led us to create many actions that we put in place, and they were very intense, decision-making that it would take us a much longer time. We had to be very fast, and that was a record in terms of delivery of platforms and the adjustment of our sales, and a very intense one.
At the beginning of April, we gave an interview to Folha newspaper, and we said words that President Juscelino Kubitschek said, that we did 50 weeks in five. What are we going to do strategically? What kind of categories will be important for our consumers? We will not be able to have click and collect, maybe, and store pickup. On the 20th, we already had a film on Globo with free shipping. At Globo, when all the stores in Brazil were closed, only Magalu platform allowed the closed stores to sell online. The autonomous people who were at home also could sell online. Many deliveries, very significant, and very short time for us to do this, 50 weeks in five.
These five weeks were weeks of definitions of safety protocols and the implementation of our safety strategies, and a very big evolution and a very major adjustment in our sales because of this storm, winds coming from everywhere. In May, I think I'm going to say so many things during this presentation, but by far the most relevant is this figure here. Up to May 20, we are growing 46%, including 1P, 3P, brick-and-mortar stores, and 60% of the brick-and-mortar stores still closed. In spite of all that, we are growing 46% vis-à-vis last year.
I think this figure alone shows very objectively and very clearly and puts in evidence the quality of the work done by our team, our crew during this storm and the sales that we adjusted in March and April, coming from many years of investment in digital and in the culture of our team. Very strong team. We have a whole history. It's not only the last five weeks. You cannot really make a difference overnight. What happens is that we are really collecting all the fruits of everything that we planted. First of all, it comes from our accounting. This is a figure that is not something abstract. This came from our accounting, and GMV is a very important figure, and we wanted to have KPMG verifying this figure. Second, we have not changed the number of last year.
Last year was the one that we reported last year, a very high basis for comparison. What happens is that we start already with a very high comparison base, and this figure is higher than before the pandemic. We reported GMV growing 35% in the first quarter, and we are growing in May. Everything points to the fact that we are going to close May, we still have a few days, but they are very good, and we will probably have higher growth rate than before the pandemic. This shows how fast we are in terms of going against the wind. I think what is very important is that this number is real, as I said, this is concrete, and we are not making any trade-offs. We are not releasing sellers that do not wish invoice.
The degree of strictness on our part is the same. We demand that they have a digital certification, and we are helping them to have the certification so that they may issue their invoices online. We do not waive anything in this moment of pandemic that will go from offline to online retail. Government will be paying even more attention to tax evasion that happens in marketplaces. Formal electronic retail is our responsibility. The platform, they cannot waive this responsibility. As far as I'm concerned, the most important thing is that we are achieving growth, respecting the health and the safety of our employees.
At the same time, we only accelerated after we put in place all the safety protocols, after we made all the investments to guarantee that our people in the DCs and our partners and the stores that were reopened after April 20th, after we were certain that they were all working with total safety in our workplaces. They have more safety in our places than outside the workplaces. We didn't make any trade-offs. We didn't waive anything. I'm going to publish an article this week saying that for me, the only way to conciliate economic development is by means of digital transformation and preserving the health of everybody. I believe this figure is very inspiring for all the other companies. We are not making concessions. We are not having any trade-offs.
We can conciliate these things that seem to be very antagonistic. By means of digital, we can do that. The countries that had a higher digital participation felt the crisis less than the others. We have very encouraging figures regarding our economic recovery here in Brazil as well. You could say, well, this only works for a very large company like Magalu. No, we are making this available for very small and medium-sized partners as well. When you are in the middle of a crisis, you have to have principles that are your north. You have the whole process of decision-making. The principles have to be our north in our daily decisions. First, health and safety. This is the basic principle. Looking after the health of our people, our clients.
We are not talking about the protocol for IT, for governance, in order to waive any legal responsibility. No. We are talking about a structure of health and safety in practice, hands-on. I'm going to say a few words about that as well. Amazon had disruptions in their operations, and because their safety protocols in the U.S. were not as well adapted, and they had some situations in their DCs that we are trying to avoid as much as possible. When the crisis is very serious, this is very difficult because you have to guarantee that in the workplace, people are safe. We are always measuring whether people are safe in our DCs, in our stores, in any other situation. The second is the preservation of cash of the companies. Because if you do not preserve your cash, you cannot preserve jobs.
When you preserve cash, you preserve jobs. I'm going to talk about that. We got into this crisis with a lot of cash. This did not lead us to lower our guard. We worked as if we had no cash whatsoever, because we didn't want this surplus of cash to shift our attention. We worked as if we didn't have any cash. This is the way we worked in terms of renegotiations of contracts. We raised these funds with investors last year in order to make investments, in order to grow the company and not to spend this in a crisis. Of course, this gives us a very high degree of comfort. Well, the slide is slide number five.
We have cash for a long time, and we could have two years of all our stores closed with the amount of cash that we have. When the wind comes back in a favorable fashion, we want to have enough cash to place ourselves in a comfortable leadership position in all the markets that we operate. The other point is job maintenance. We had a lot of help from the federal government. Together with the government, we made a fantastic job. With this new MP, allowed us to use some resources extensively with a lot of support to our teams, and we are going to talk about that, and the continuation of our operations and the radicalization of that, which was part of our strategy. Our company is already digital, but now we want to make the Brazilian retail digital.
We accelerated all that with the pandemic. I'm going to say a few words about that. I'm going to slide number six first, talking about health and safety. We define safety protocols in the DCs mainly, or first, because the stores were closed. 20,000 people on vacation, so we had time in order to work with our store safety protocol. We started with our DC and the disinfection of our DCs and the disinfection of all the workplaces and the use of masks and hand sanitizer and measuring the employees' temperatures outside, that is to say, before their means of transportation to go to the DC. We started to do this monitoring and auditing because sometimes the person removed the mask and this. We are monitoring all that, the same regarding the stores that were reopened as of April 20th.
In some places, some locations where we can open stores, I am going to talk about that, in some places, we believe that the decision on the part of the government, of the city administration was not correct. As our standards are concerned, we do not believe it is safe enough to open the stores. We placed the infrastructure for all these issues of measuring temperatures and the safety infrastructure. We are doing this more and more in order to guarantee the safety of our teams. With a lot of support to our people, home office. We prepaid the meal ticket, we prepaid the 13th salary, and we lowered the target for sales. We created a channel of telemedicine so that our employees didn't have to go to a hospital or a clinic unnecessarily. We placed this for free of charge for our people.
Over 2,000 consultations in the last month, in some cases that we tracked, they were contaminated by COVID going to a hospital, et cetera. Of course, if necessary, you have to go to a hospital. I'm not saying that telemedicine totally avoids this or replaces this. Okay, ever since the beginning, our whole analytics team produced information about risk score since the beginning of April per municipality, that we could know where we could open the stores and where we shouldn't open the stores. We created a risk score per 1,000 inhabitants, the degree of infection or the rate of infection per 1 million inhabitants and ICU occupation, the situation of our partners or the health plans that look after our population.
A lot of information from our team, our analytics team, so that we could know whether it would be safe to open a store or not in that specific location. In Rio Grande do Sul, they're doing an excellent job in this regard. We already have some stores that have already been reopened, but we open or we use this risk score. I'm going to show you a logistics videotape in order to show you the situation of our standards regarding safety in the DCs.
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About the reopening of stores, we have 40% of the stores already open today on May 26th. 420 stores, more or less open. We are going moderately optimistic about the reopening of stores because of a natural geographical hedge that we have. Our characteristic and our whole history has been regarding the locations where we open physical stores. Most of our stores are in small cities. When you look at the COVID map, I'm on slide number eight now. You can see that most of the death and most of the cases of COVID, they are located in the bigger cities. Over 400,000 inhabitants, almost 50% of the cases. We have a distribution of our stores.
70% of our stores are in cities that have less than 400,000 inhabitants. We only have a handful of stores in shopping centers. Most of them are street or standalone stores. This is a characteristic of our stores. Because of that, we have a degree of optimism because we believe that a major part of these stores will be reopened in June, maybe all of them reopened in the next quarter in Rio Grande do Sul, as I said. São Paulo is along the same lines. The government will liberate first these smaller cities. These stores, besides being very important for us in terms of revenue, they are profitable. They are very interesting from the viewpoint of profit generation. Beto will talk about that. Now, slide number nine. Preservation of cash and jobs.
We got into the crisis with a comfortable cash situation, but we had to take an attitude as if we didn't have any cash whatsoever in order to be even more austere, more frugal.We issued debentures at a fantastic rate, 1.5% CDI + 1.5. This is one of the best in the market. We discounted a lot of the receivables as well in order to reinforce our cash. We might even go to the market again and do some other operations, although we are optimistic. Sometimes what happens in other places in the world is that you reopen, and then all of a sudden you have an increase in the cases, and then you close again. I believe that this is a very delicate and very sensitive situation. We have to pay a lot of attention to that.
From the viewpoint of the control of the pandemic in Brazil, I'm not very optimistic. We renegotiated, and we postponed many contracts with our suppliers in direct and indirect materials, and we renegotiated some payments with our partners, and they have been recognizing this, and they will certainly recognize this because they can see that we're very strict, and we were very supportive in this regard, and we privileged the smaller players and the small carriers and smaller transportation companies. We made loans to them. Even for small sellers, we gave them 3.99, which is practically a subsidized rate. We do not want to have profit from prejudice. When we use the Provisional Measure 936 for most of the team, many people were covered by this Provisional Measure 936, and we made very detailed studies about that.
We're benefiting from this Measure and our employees as well. This helps us reduce this. If you didn't have this Provisional Measure, it would be very difficult to hold on to the job. It was fundamental. I would like to congratulate the government for this Measure that was very well implemented. I'm renegotiating contract, and we are reducing the opening hours and the working hours and the CEO 80%, VPs 80% reduction in salaries, 50% members of the board, and because we have to give the example. First, we reduced our own salaries, and we believe that everybody in the company contributed. We had a reduction in the working hours, for instance, of 10%, and I thank everybody for their cooperation and for understanding the difficulty of this moment. Thinking about the collective aspect and not the individual aspect.
You can see that everybody was very involved. We have some real estate that we lease to stores, and we reduced the rent, of course, to help the stores and also our social engagement. We made donations, and later I will talk about that. The controlling family, Magazine Luiza, is making some important contributions to sellers, mainly for the small suppliers and employees, many benefits. For society in general, the controlling family really took this from their own pocket, and this is proof of the serious governance that the company has. Now we are talking about digital, and this is the main topic. We digitalized Magalu, and for some time already, we started the cycle two years ago. You can see that at least for two years we have been doing this.
Now we radicalized, we accelerated many of the projects of our strategy, exponential growth. I would like to highlight the revenue from the physical stores. We have to have a platform to make the whole retail digital. The countries that digitalized a lot, they had platform that contributed to digital inclusion. I'm on page 13, and then I'm going back. We have a very fast exponential growth. New categories. We radicalized new categories because some categories were not scheduled for this year market.
The super app, which delivers everything to the end customer, faster delivery, and Magalu as a Service, MaaS. That was done for 1P alone, and we're doing for 3P as well, payment and deliveries and other services like the issue of invoices and back office. We are delivering a whole package of our technology and making it available to our sellers because we want to be the best solution for them.
Not only the ones that already sell online. Let's go back to slide number 12. One of the characteristics that happens in countries that have been through the COVID-19, the most emblematic case is China. You can see that in these countries, there is a change. A change in the profile purchase behavior, and also the channel that drives the purchase. Think about China today. You can see in China there are some industries that after COVID-19 are going very strongly. Online and offline, the orange dots. Foods, for instance, was very resilient in the crisis and remains stronger. The same goes for beverage and what they refer to home care. Well, not home care, but hygiene and cleaning home products. They are all at a very strong level, both in online and offline. We have different axes here.
The same goes for communication processes and products like smartphone and tablets. They are just as important as foods, slightly behind foods, together with beverages. These communication products, we can see a strong boom. People who are at home, they need to connect. These elements, we can see this boom with a very important driver, not only in e-commerce but also in the stores that are open with a positive performance. Like beauty products and electronics and home appliances. Not only smartphones, but home appliances. They are being recovered in China, the black dot, particularly online. The driver of this growth is particularly online. The thing is, by and large, what I want to say on this slide is that electronics categories and consumer goods and foods are doing fine. They are resilient. It's only natural to reinforce them.
By and large, these categories are growing very well and powered by digitization. That's what I wanted to say, just to give you some context, and then we can talk more about it in the Q&A. Speaking of category on page 14. From the very beginning, we realized there would be a lot of demand for consumer goods online. We accelerated exponentially all our deliveries to the market. It was not a focus category for the company for this year, but we decided to do it. We were very much focused on sporting goods, fashion, and beauty products. We accelerated a lot with staple goods, staple foods, beverages, including hygiene products, diapers. We are one of the best sellers online of washing powder and diapers in Brazil, and also the largest number of purchases in this category, generating more purchases per month.
This category is key to Magalu when it comes to DAU. We talk a lot about MAU in app, but the focus of any super app is DAU, the daily user. We don't publish this number, but it's growing a lot. The daily number of customers in our app and certainly in the market was only in the first steps of the journey. There's still a lot of room to grow, and this is helping a lot. This is not a category that is profitable yet. We are working a lot in order to have a break-even point, but it's very strategic to us when it comes to frequency of use, frequency of, well, the increase of MAU, DAU, and one of the main KPIs early in the year. It's going to be a point of no return, not only in the pandemic.
We'll be investing very heavily in these categories. I firmly believe that in some cases, if you think about, for instance, Pão de Açúcar or maybe even Carrefour, they have a good online experience and happy working in 17 of the 500 cities in Brazil. When you go to the countryside, smaller towns in Brazil, the delivery time when you buy a product online, it takes sometimes two weeks to have it home with a SKU rate of 70%. It's a very poor experience, and we want to use our digital ability to get into these categories in 1P, buying products and having them in our stores, which is direct store and ship from store.
We want to have products in 600 stores in the market, in these stores' warehouses in order to have the dark store model same day using our own room, our stores. Also via 3P through Parceiro Magalu. Not yet, we want to go digital with small retailers, particularly for foods now, and also support with payments and logistics in the future. These are the plans. This category has come to stay. It's the beginning of a long journey, a long marathon, and we'll be very much engaged using most of our cash power, funds, the digital ability of our business team and labs to make it all happen. We have important partnerships, top to top with most of these companies. We have Coca-Cola via distributors. We also have Heineken, Ambev, P&G, Unilever. We're speaking a lot. Nivea, L'Oréal, Kimberly, Johnson, Diageo.
We have great partnerships with the key brands. Very selective with 1P, with a higher ticket. We believe this is right along the chain, with significant programs and commitments, a long-term partnership, very open, trying to add value, provide good service, and naturally also make it in a very sustainable manner. When it comes to the rest of the assortment, Netshoes is doing great. Surprisingly good, because in other places in the world, the fashion line and sport goods were affected. Marcio and his team job is amazing during the crisis. After April, with reorganization in house, May is being great, contributing a lot to our growth as well with good margins. We managed to close very significant days with Adidas.
There's specific deals, I mean, partnerships that we can sell now via marketplace, premium products of these brands, Adidas, Mizuno, ASICS, which is also a former effort by Marcio. Brands that are adding to our portfolio at Netshoes. Zattini is also doing very well. They used to have a winter collection. The fashion category in Brazil as a whole is suffering. That's true. People keep on having to buy things. When they buy, they buy online. Because Zattini is important online, it's growing a lot. We have several partnerships with Pernambucanas, Marisa, Besni, VR, Hering, Anacapri, several brands that are part of Zattini's portfolio, and also those that allow to be in Magalu's mini worlds. Whenever our partner allows, we have negotiations, they improve our apps. They have their own apps, when brands allow, we have the same catalog in Magalu's world.
Epoca is doing great as well with cosmetic, growing 150%. Several significant brands, the greatest portfolio on the web now. Very global and surprisingly well. The growth is really amazing. Men and women are still taking care of their beauty even though they are at home. They're buying online today. Now I'm going to show you a video. We have a very strong campaign, and we benefited from our cash to invest in marketing, investing in brands, and to make these known categories better.
How are you going to be known as a company that sold only home appliances for 60 years? That's why we are trying to build these new categories. We have a video now about Magalu with a very good song and jingle. I just want to share it with you. The digital campaign is huge in addition to the video, but I think it can make everything very tangible in our position.
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Good. Just a short video. This is a webcast, right? Obviously all these worlds are part of our super app. We keep on insisting on the super app. 70% of Magalu sales come from mobile. GMV is mobile for Magalu. MAU increased 111% vis-à-vis last year, 21 million. Like I said, we're increasing a lot of DAU, 26 million of installed base. This number also is in Netshoes' and Zattini's apps. The bulk is Magalu. We are investing in growth. The most significant number is GMV. It is not DAU nor MAU. We have to sell. If I want to spend my cash to have 50 million MAU, I can do it. However, we always do the math in terms of audience, installations, facilities, bounds. I just show you this figure just to give you some fundamentals of our path.
What really matters is 45%-100% growth and not necessarily MAU. That's just a number that shouldn't be more objective than it is. As for faster delivery time, the crisis made us work up. To some extent, I believe we are accommodated with store pickup. 40% of our customers would have store pickup. With the crisis, the stores were shut down. We would even have authorization to open some modalities for store pickup. We thought in order to contribute to social isolation, I could even have this available store pickup, negotiate with the mayor. I could do it at the store entrance drive-through. We wanted to deliver, have home delivery. We benefit from the crisis, and we modeled our strategy, and now we benefited from the crisis to accelerate ship from store.
We can have the delivery the next day and possibly the same day. It's our dream. We'll get there somehow. We shifted our focus, particularly considering Netshoes products, our products, 40 +, in order to have it home delivered. Store pickup is still a more inexpensive option for Magalu, but ship from store is less expensive than the DC. When we shut the stores, we lost this option that was very cheap for us. The truck would take the product to the store. We decided. And by the way, we started to ship the product from the DC to the customer's home, paying a higher rate for 150% of online sales. It was growing a lot.
Logistics account was very high, w e said, let's shift everything to ship from store, and let's enable the stores to open as DCs, not only for store pickup but also ship from store. We used Logbee. We created a plan, an exponential growth plan for Logbee. In 2018, when we acquired, was one store in one city. Now we are operating more than 600 stores or 90% of our cities. Today, we are having a significant share, close to 20% of ship from store, trying to get even higher. It's a long way to go to reach 40%. We are going to have both in the future, store pickup, ship from store, but the bulk of our logistics chain will be hyperlocal. We want 1P goods and 3P goods in the future, but let's focus on 1P only first. We want it to be close to customers.
Our whole intelligence area, supply area, we want to avoid the good to travel too much, because the less the travel, the lower the cost. I need the right product, the right store, so when you buy, I deliver close to your home, maybe the same day or next day. Today, that's our focus. Logbee in more than 600 stores, a whole system to make it happen. The whole system process. Well, the store is running as a DC. The stock clerk is like a checking inspector. He beeps the product, sends to the inventory. They do the counting all the time, inventory management. The customer buys, it is delivered. The whole tracking is there. A lot of Labs delivery to make it happen. It's far more challenging in practice than it might appear.
The most challenging of all, which is our challenging, is to have the right product or the right supply for these branches that we're working very hard to have the product in store and in the right DCs that supply to these stores, so we can raise the bar to an even higher number of ship from store. The store pickup was 40%. If we add them both in the future, we want to have more than 50% of our sales. Logbee, 60% of courier deliveries of 1P and Magazine Luiza, 90%. We don't rely so much of market carriers. Carriers are having a high volume as e-commerce grows. Some are having a hard time. It's very important to have your own network right now so you can have some assurance. Unfortunately, I depend to some extent, or luckily, we have our own network.
Unfortunately to the market, some carriers are having an excess volume unable to deliver. Places like Rio, for instance, they have a serious problem in the postal service delivery times owing to COVID-19. Many people have to be isolated. The post office guys are heroes. I think they're doing fine considering the problems, but they have a guidance that also depends on the market context. The evolution, well, was tough in Rio, in Pernambuco, at the postal service and also São Paulo. It's nice to have your own network, but naturally also depend on other third-party carriers, important partners of ours. By the way, I wish we could use Logbee more often to 3P. Later on, I'm going to show you that the current rate is 20%. Magazine Luiza, 20% of total 3P is there.
1P increased so much that it bit some part of the additional capacity of Logbee and Magazine Luiza. We increased from 0.3 to nearly 20% in a short time frame. I would say for two years, we launched this modality already 20% of the total. We want to expand Logbee and Magazine Luiza to grab a larger share of 3P. On page 21, the previous number was the figure for 1P. We want our own network to have a larger share in the total 3P. We are working to do that. Magalu Entregas is 80%, but sometimes I take products or the seller ship to third parties and not with our own network. Magalu Entregas, from the total 3P that goes through our network is 20%. We want to increase. We don't increase more now just because we increase a lot in 1P.
1P is growing to 100% in May. It's eating the additional capacity that we're building in Logbee and Magazine Luiza. We have a firm commitment. We're going to accelerate investments to also provide to the seller our own network, which is very efficient and inexpensive. If we need to count on third parties, we'll do that. As for physical stores, brick and mortars, what is the performance? On slide 22. We used to have more than 10,000 sellers enabled with mobile sales, a system fully integrated with our inventories, integrated with the payroll, with everything. We only enable to use mobile sales, and we have products and services being sold, and it's integrated in all social networks. I have sellers with amazing numbers with remote selling. I'm not going to give you many details.
600,000 per month by a seller, one in Recife, another in Franca selling more than 300 per month. Mobile sales gets to the store, not to e-commerce. At Magalu, our rationale is that the sale is originated. It is necessary in this modality to work with a closer margin to the store. In e-commerce, in addition, well, you're paying the seller cost. If you pay with the e-commerce margin, paying the seller cost, your result will be lower. We firmly believe that they will help us sell more in the physical stores. We book in the physical store. We are breaking it down. Just highlighting again, all the sales to mobile sales remotely are in the physical store and not to the website. The project is doing fine, accelerating a lot. Nearly 2,000 people selling, we increase a lot in June.
From the moment people move, we want to make sure they have a good pay, BRL 40,000 or BRL 50,000 per month average. Naturally, some are outliers, they can have a good compensation and earn more. If they migrate remotely, they have to be with a good performance, good conditions. On the next slide 23, a couple of words on the results for the physical stores that we open again. Amazing results. These physical stores, even though we open, but we only have 40% open. We have 60% fewer physical stores open compared to last year. We have only 55% of the sales below last year, the number we spotted. We have positive same-store sales of these stores vis-à-vis last year. Low single digit for these stores. Our result is surprisingly good, I would say, considering all the restrictions.
People were afraid of walking down the street. We don't know if that's a trend in the long term. In this month of May, we started opening and have good results. We are not trying to do too many campaigns. We don't want too many people crowding in the stores. We open without any noise, very carefully with the whole safety protocols and infrastructure, but the team is working fine. Anyway, we believe, like I said before, part of the natural hedge will have more stores opening in June. I cannot mention their importance to our results because they bring more positive contribution, but also to the website when it comes to store pickup. We are rolling it out from the moment we know this is not going to bring trouble to our customers. We are also rolling it out with store pickup.
Ship from store was already running, without the presence of customers. Finally, I would like to close my part of the presentation with marketplace. The main highlight of the company's result in the first quarter and April and May. Well, we have our partners, our sellers. We had an additional leap here because the sellers we were approaching until the end of May were already digital. 5,000 retailers in Brazil. Only 50,000 were online, and we were searching for them. In the pandemic, we decided to accelerate an important project. We have Parceiro Magalu, and we want the small and midsize retailers who closed their stores, we wanted them to sell online. We built a very easy friction-free system. Naturally, the seller needs to comply with many regulations, have to be reliable. We did an amazing job.
In one day, the guy can be running the store if everything is regulated. Otherwise, it takes longer. Some sellers are in the process to be according to the regulation. We have many notaries that are closed, the process is slower, now we're trying to accelerate by going digital. We have more than 20,000 corporate taxpayers being enrolled. The platform also have people who used to be self-employed individuals. They can sell and have their own little store and have a commission. We have more than 300,000 people in this new platform. Everything very easy to use, supporting two significant parts of the population that were alone with a hard time to survive, economically speaking, owing to social isolation and the pandemic.
Once again, I firmly believe that digital transformation is a means to put together the economic activity with respect to the government measures of social isolation. I think we can put these things together. Now we are going to have Magalu partner video just to show how they support us. There are a lot of testimonials that make us very proud so we can generate and foster digital transformation.
[Presentation]
My investor relation people are saying that I have to stop. Well, one milestone that we had in April, as you know, we launched Magalu Pagamentos last year. We have this portfolio that belonged to one of our clients, in April we generated BRL 500 million in TPV that went through the platform of Magalu Pagamentos, which already enables us and automatically we filed with the BACEN, the central bank, a request to be a means of payment company. Most of our sellers, they are anticipating their participation in the platform, this is increasing the take rate for the company coming from this prepayment.
We have the prepayment and the seller can have that increase in both cases, increasing our revenue. The marketplace is improving its economics this way. This is an important way to increase the revenue of marketplace. That will be the big revenue generator in the future. We believe that the value of the company, the results of the company, will come a lot from the growth of marketplace that has very positive economics. I don't understand platforms that do not give a good result because they should. In our case, we believe very deeply that this is a platform that we will have a very good economics for payment and the average of services and the take rate, et cetera.
We believe that this will give us great joy in the future in terms of cash generation from our marketplace, and the payment is very important for that. Beto will talk about the FIDC. Slide number 27 now. We have been growing much more than the marketplaces in the market. E-commerce growing much more than the market, but mainly our 3P. We see that 185% was the growth that we had in the first quarter, 430% in sellers. You can see everybody issuing invoices, not waiving our extreme care in terms of the correctness of these companies. All of them work formally, and we at the same time, we are keeping the service level. There was a drop in April and May because there is a very big reliance yet on third party for transportation.
There are so many people, new people in the market, a sudden increase in the volumes, and we want to improve the level of service of the marketplace. In terms of growth, the growth of our marketplace is outstanding. It is much higher than everything that you see in the market, it is in our strategy. Digital platform. This is a digital company for a digital platform. This is the focus of the company. We have already a Magalu Digital one. We want to digitize retail as a whole by means of Magalu Serviços. I have already talked about growth. I'm no longer going to talk about that. E-commerce 138%, 130% in May. Slide 28. You can see that this is based on a 50% growth in the first quarter of 2019, 65% in the first of 2018.
You can see that the comparison base is high, so we multiplied sixfold our e-commerce in the last six years. If you take the revenues published by the major players in the market, you add their GMV, and you take the share of each one regarding this amount, you will see who is gaining share or not. This is very simple. Only Magalu has been gaining share in the last few years in the Brazilian e-commerce if you consider the top four. It's very easy. GMV published, and then you can see who is gaining share and who is not. You take the first quarter, you add GMV of everybody, have the result of the first quarter of one year ago, two, three years ago, and you can see who is growing more than the average, who is gaining share.
This becomes much more clear and objective as information for you, with no narratives that are not material or not real, I would say. Okay. On page number 30, we have our donations. The families have been donating ventilators and mattresses and for Hospital Emílio Ribas, Amigos do Bem, NGO. We are working with zero profit for the students of the public education system of São Paulo State with Jair Ribeiro's NGO. He was the creator of that. We are embracing this cause. We have launched this plan for the students. We wanted the students of the public network of schools to have the same conditions of the private ones. We helped over 38 institutions in over 10 states. We will probably roll this out and extend this. The family will probably increase the amount.
Solidarity that came with the crisis will not give any step back. We are very happy to be able to contribute. We want to intensify our contribution. Before giving the floor to Beto, I know that I have exceeded my time. There is so much that I wanted to tell you. I cannot really say all that in 30 minutes. We have been recognized as one of the most appreciated or most recognized brands by the client in terms of helping solve the crisis. We are very happy with all this recognition. This is not our objective. Our objective is to help. What companies are doing will be forever engraved in people's memories. People are more and more aware of that. They will be buying more and more based on the value of the company in terms of solidarity.
We will probably make many mistakes and we have many challenges that Beto will be talking about. Beto, I apologize for exceeding my time.
Good morning, everybody. Thank you very much for participating in our third video conference. I will try to go fast in order to recover the time. I would like to start with a highlight on page 29. We have already grown 34%, as was said before, reaching BRL 7.7 billion. With the temporary closing of our stores, we had a loss of about BRL 500 million, and -4% here, then probably it would be 8%. We lost in 10, 15 days, as you can see, and 8% over 8% last year. You can see a high growth in physical stores, marketplace, e-commerce, big highlights.
Talking about the EBITDA, we had already talked about that, and we continue to invest in service level, logistics and service, the acquisition of new clients, seeking a much higher growth than we said in our last letter. In EBITDA, we have a little bit of this effect of the increase in expenses because of our improvement in level of service, the integration of Netshoes that has not been integrated yet. We will be doing this over time. Mainly during this quarter, about the temporary closing of the physical stores, our dynamics regarding results of the physical stores is the following: they bring a much higher gross margin, much higher than our average. In e-commerce, the margin is lower. Of course, the fixed expenses are much higher in physical stores.
When you shut down the stores at the beginning of the month or the middle of the month, there is nothing you can do about that because you had already contracted all the expenses. If you estimate the sales loss, the gross margin, and some variable expenses that could be avoided, then you have a very high contribution margin in physical stores. The EBITDA would be higher then. Without that, it was 274. It went from 8.9- 5.2 margin. Probably it would be 1.5 or two points more without the closure of the stores. Dilution of financial expenses, we had the net profit of BRL 31 million, adjusted the loss of BRL 8 million.
In terms of capital structure, I would like to reinforce that we have almost BRL 4 billion in net cash, adjusted net cash, one of the best capital structures in the market, certainly. When we put total cash and the current issue or recent issue, we have BRL 5.4 billion with the new debenture. You can see a very sound net cash position. Let's talk very quickly about On slide number 30, we show the very quick growth of the number of users, active users, MAU. We reached 20 million, as I said. Active customer base also growing, 26 million active customers. Growing 43% year on year. E-commerce client almost doubling vis-à-vis last year. Very positive figures. Physical stores, opening almost 200 physical stores in the last 12 months.
Accelerated growth. Also, we invested over BRL 100 million in the first three months of the year, growing by 31% year-over-year. We show the evolution of sales. As you can see in this quarter, we sold BRL 2 billion more than the same quarter last year. It would be BRL 2.5 billion more if it were not for the closing of the stores. This is a very high growth. E-commerce also growing a lot. 73% for a market that grew 23%-24%, according to the official figures. The evolution of the gross profit, a drop because of the increase in the participation of e-commerce because the margin is lower, and the closing of the physical stores also hitting it. The gross margin would have been higher if it were not.
The same rationale about the expenses, because it was not possible to dilute expenses in this quarter. The equity income line, we had been going up and up. This quarter we have these BRL 5 million in Luizacred, which is BRL 2 million in equity income here. We will be talking about Luizacred in detail later on. On the next slide, we show the quarterly evolution of the EBITDA, which was one of the factors that we have already referred to. Financial result, we diluted financial expenses 0.5 percentage point. If you remove IFRS 16 and the figures about the lease, then the drop would be 1.8 percentage point to one percentage point. A low financial expense. What you have here is the situation of the prepayment of receivables, minus the financial revenues. Working capital. I would like to explain this.
We had a variation of minus BRL 1.8 billion- BRL 500 million, BRL 2.3 billion variation, totally associated to the reduction in the balance of the suppliers and inventory increase in the last quarter. As we sold a lot in the last quarter, it usually drops afterwards, minus BRL 1.8 billion, and then you have payment to suppliers that usually happen in the following quarters. We decreased this by BRL 1.8 billion this quarter. We reduced our cash because of that. As of now, the accounts payable balance is much lower, BRL 4 billion only. For in inventory. In this quarter, we have a balanced situation, whereas normally it's usually BRL 500 million, BRL 1 billion, better than the inventory. In this sense, the BRL 500 million in working capital, normally it would be minus, such as happened in March last year.
This variation of BRL 1 billion is basically associated to the inventory increase that we did strategically since the beginning of the year. We started to see the risk of supply, and we decided to increase our inventory by BRL 500 million. In the last days of March, we did not sell about BRL 500 million. All that led to the increase in the inventory level proportional of almost BRL 1 billion from 70 days to 90 days turnover. This is not normal. We usually have 70 days of turnover, inventory turnover. This has already started. This is a very big advantage that we have. We are multi-channel, with the growth of e-commerce, we are already selling a lot of products from the DCs, and our turnover is improving quite a lot and the balance suppliers, we paid a lot in the first quarter, as we said.
We are already improving this position. We already have this contribution in terms of working capital and for the next two quarters, this will probably happen. By the end of the year, we will have a position similar to last year's. Working capital is seasonal. We did this strategically. We took advantage of one situation. We reinforced our inventories at a low dollar rate. We used capital. As we have a very good capital, we are very liquid. We wanted to make this investment, and as a consequence, it is really helping us boost our sales in this quarter. The adjusted cash flow is very much proportional to the working capital that I have already referred to. On the next slide, we show the evolution of our cash.
You can see BRL 4.4 billion without considering the improvement on working capital and the net income, adjusted net income. I would like to turn now to Luizacred. Up to March, we were growing very fast. We went from BRL 4.4 billion- BRL 5.3 billion, BRL 4.5 billion- BRL 5.3 billion. 22% of revenue is going up, reaching BRL 7 billion in expenditures on Luiza Card, 8% increase inside the store, inside Magalu stores, and 28% outside Magalu Luiza, which is a sign of very big activation, 30% increase in the portfolio, reaching BRL 11.6 billion. The pace of growth of new cards slows down because of the stores closed, so credit assignment goes down. We also have a more conservative approval process, and people are spending a little bit less outside because of the pandemic.
From now on, what we will have around the middle of the year, it will be more difficult for Luizacred, partially due to this slowdown in the growth rate. We go to the next slide about portfolio. Looking at short-term delinquency, it was 3.3%, a very low level. Well, improvement over last year. Over last year, the credit policy of Itaú is very conservative, and it was further improved. We had a trend of improvement in delinquency levels. This reinforces the importance of the partnership with Itaú because they are in charge of our part of credit and collection, and also the cost of capital of Luizacred, which is low, and with the guarantee of the Luizacred funding. Now going to the long-term delinquency, it should be seen vis-à-vis the recent quarters and not last year. It was stable vis-à-vis December, very much under control.
I would like to remind you that it went up in the middle of last year, and the percentage of new clients was going up very steeply. We had the maturity of the base. We had the maturity of the base, and with the closing of the stores, the impact was not strong. We closed the stores in the last 10 or 15 days of March, and most of the impact on Luizacred and any other similar operation, it starts to be shown in these indicators in the third quarter. The good news is that we have a high provisions level, we would have to track this crisis and the performance of our payments. If we look at this quarter, there has already been an increase in our provision level.
At the beginning of last year, there was a mismatch because Luizacred, the first quarter of last year, had BRL 36 million, BRL 35 million in profit, but they were already provisioning much more because of IFRS and because of losses. In the middle of the year, the situation changed, and at the end of last year, Luizacred was already giving more profit in IFRS than in BR GAAP. This should be the trend, or at least a balance this year with a positive trend. What happened in March was that the level of provisions became much higher than before because of the crisis. Because of that, we saw a reduction in the net income in IFRS, and we had to have the reinforcement in the level of provisions.
Should the crisis continue, if delinquency continues to go up, there will be a difference between the GAAP and IFRS, because in IFRS, you see this later. Ever since the beginning of the crisis, we have about BRL 5 million, between BRL 2 million-2.5 million paid every month at the stores. It was very difficult for them to make their payments because they went physically to the stores. We communicated with these clients in all possible ways, encouraging them to pay digitally so that they shouldn't leave home. With all the assistance on our part and with people who worked at the stores helping them, some in home office and some already with the reopening of the stores.
We put in place many initiatives in order to better serve these clients and also to decrease this delinquency level in order for them to keep their good credit score. In April, collection was more difficult because most of the stores were closed, we started to reopen the stores only around the 20th of April on. Other stores were open only to receive payments. Today, we have about 60% of stores open for clients to come and pay physically. The performance of accounts receivable in May is better than it was in April. It is not still at the pre-crisis level because I think this is the situation for everybody because the finance companies and banks will have an increase in delinquency depending on the size of the crisis. In our case, the good news is that we are very well provisioned.
There could be an additional reinforcement of provision over the quarter, but this is just temporary because Luizacred is very well-positioned, and our client base is very loyal. Most probably during the second half of the year until the end of the year, the situation of Luizacred should go back to normal, such as it should go back to normal for the physical stores. I think these are the main messages regarding the results and also Luizacred. Now I believe that we could open for questions. Thank you very much.
Thank you very much. We will start the Q&A session. In order to ask a question, please press star one. Questions will be received via chat from the webcast. Our first question comes from Robert Ford, Bank of America. You may proceed, Mr. Ford, Bank of America. Please ask your question.
Good afternoon. Could you please talk about your view of the pandemic and how it impacted your business model? What about the development of your stores in the medium and the long run? Could you talk about the impact on your marketing and investments? Because your growth at this time was incredible. Could you talk about the variables underlying this?
Bob, thank you very much for your question. As I said at the beginning, if you look at our strategy, that is to say, Magalu wanting to make the Brazilian retail digital, and if you look at the strategic pillars of this process, I would say that this is a more radicalization and acceleration in the implementation of the strategy. We accelerated many things. All the executive committee and the whole team, we are all working in this direction. I would say that this is more a radicalization.
It's not really a change, because we want to be the operating system of the Brazilian retail, not only for my physical presence, but also the physical presence of third parties, that is to say, the Magalu partners. I'm using their physical presence, their physical facilities with my operating system. I do not see a change in the vision. It's more an acceleration of the strategy. That is to say, doing this faster and making investments faster, that we may gain scale faster. We decided to accelerate, we want to continue to use our cash in order to accelerate, with consolidated and sustainable moves. What is important here is that for the long run, our view is a view of platform. There will be an important displacement.
This new cycle of the company is the next cycle that we want to grow with the help of other companies and vice versa. In the previous cycle that we had, we had to grow alone. There were no other companies. When I talk about the marketplace, I'm talking about the platform, which means you're helping other companies to be digital and to generate volume. Doing this with a high level of service with the necessary economics. What you have been seeing in our results is a strong trend, and the store itself playing a more strategic role for 3P and not only 1P. Today, it's very important strategically for 1P, but it will also be an important point of support for small sellers and store pickup, so that the sellers can ship their merchandise.
I would say that this is totally in line with what happened, that the pandemic is generating more digital consumers. Our sailboat was already prepared to face this reality. All you have to do is adjust your sails, no big changes. In terms of marketing, we are investing in marketing with more organic accesses than in the past, because people need to buy online. That is to say, they don't want to go to the streets, they want to stay at home. There are many people who want to be at home, they do not need encouragement to buy digitally, to buy online. Edu's team has been doing an outstanding job, his whole team, marketing people, Bernardo, everybody, Julinho, the whole team of Eduardo Galanternick, they are doing a great job.
They are very technical. Our investment in marketing, Bob, has been very precise. I can generate a lot of reach with proportional investments. Our people are very technical in this area, so we make investments aiming at the long run and not only to look good. In my whole life in digital marketing, I have been seeing people who were not technical, and Edu is too technical sometimes. He doesn't let us spend more. ROI is important. It has to be sustainable, and he's totally right. You can see the campaign is online, but it's offline as well in Globo and the other networks, and we are using our cash. I think this is the right time for the company, such as the go forwards for CNN.
This has to do with the opportunity. We are tapping into this opportunity to show how useful we are for the consumers. Of course, I'm not celebrating because the situation is extremely sad, but we know that we can help directly. Also looking ahead, more and more platform, more and more marketplace. This is something that we are going to do based on very sound decisions, and this is our view to grow and with everybody's help.
Next question. Our next question is from Luiz Felipe Guanais with BTG Pactual. Please go ahead, sir.
Good afternoon, Fred, Beto. My question, Fred, you mentioned a little bit about an increase in the number of active customers. Could you also tell us more about the increase in frequency of the website, particularly April and May? What about the performance of the cost of acquisition of customers? If we believe the bulk of the stores are closed, possibly there is a higher conversion in the website which hits into other aspects. Could you tell us more about it, please?
Luiz, thank you for your question. I would just like to answer another question, Bob's question about Época, and I'd also like to invite Edu to help me answer. Edu, could you use your microphone and talk to Luiz?
Luiz, Bob, thank you for your questions. Just coming back to the question about Época, Bob. Época is already with a very strong growth pace, 60% for a couple of years. It was pretty much driven by the fact that there is a largest assortment in the market. We are not connected to any specific group, so we have the possibility to work with the broadest assortment in the market. If you consider everything we did in terms of the organic performance, we work on this growth without a cash burn. We had to rely a lot on organic traffic. When you have such a move where there is a much higher demand, when the customer goes for organic, you have this. Answering your question, Luiz, about the customer base and the frequency, what we can see is an increase in all dimensions.
We have an absolute number of new customer growth, something unprecedented, much higher than in the past. The frequency is also increasing. You have a multiplier effect, so to speak. If we exclude new customers, we are going to have an even significant or a greater growth owing to what we've been doing with new categories. It's only natural that if we consider an increase in the share of organic sales, then our CapEx is reduced and also allows us to invest in the campaigns that we do with Parceiro Magalu. We have to consider our strategies in terms of the market, Magalu, and Parceiro Magalu.
Excellent, Edu. Thank you. Can I just ask another question? Fred talked about FIDC. Beto didn't have time enough to talk about FIDC at the end of the call. Roberto, could you tell us more about the structure of and the evolution for the credit for seller in the platform of Magalu Pagamentos?
Good afternoon, Luiz. Thank you for your question. In reality, the focus of Magalu Pagamentos was to do the split in the transactions and advance of receivables, prepayment of receivables. It's been happening since the beginning of the year, and we accelerated the rollout ending it in March. As of April, it has taken off following our marketplace, and the natural path is to begin adding financial products to our sellers. We know that most of them are small companies, and they need working capital. They also need some financial support, and sometimes they have a hard time to get it. We have this whole relationship, all the data, in-house data, the whole experience of the seller on the platform with our customers.
We believe we can help to some extent. Help to generate a score that is better for them so they can be funded unlike what they can do today. At FIDC, there is a BNDES initiative, which is very interesting also to invest in FIDC. We are considering this possibility as well. If it's BNDES or our own FIDC, it makes no difference. The trend is the same. We increasingly want to create financial products and services to the seller so the seller can be in our system. That's why we decided to request to have this regulated.
Once it is regulated, you can have different connections at different levels and offer other services that you cannot have access to today. This is only the beginning. We've just launched Magalu Pagamentos, Magalu Pay. There is a number of initiatives that are related to Magalu Pagamentos. They will support our sellers to sell more. That's the goal behind Magalu Pagamentos.
Just adding to Roberto's answer, this is Fred speaking. There were several measures made by the government that worked fine, like BRL 600 as a surplus or extra index for self-employed or people who need it, the Provisional Measure that I mentioned, which is important to prevent layoffs. Many companies are using these, also many retailers. One didn't happen, which is the credit at the store level. Actually, most of the lines available by the government for small companies never got to small companies. Because we have a lot of information by sellers, we know how much they're selling. We believe we can help them through these lines, particularly now supported by the federal government.
We have the money with the information and all the relationships we have. These measures, unfortunately, didn't happen yet by the government, and we hope we can help in our ecosystem to make it happen. Preserving credit, also giving access for those who need it. Those sellers need it. They're growing, the more money they have to invest to improve their operations, the better it will be for us to support them.
Excellent, Fred. Thank you very much, everyone.
Thank you, Luiz.
Thank you, Luiz. The next question is from Thiago Macruz with Itaú BBA.
Hello, everyone. Good afternoon. My question is about Marketplace. On the one hand, you have an increased exposure to more frequent levels and lower tickets, I believe you want to improve your cost of acquisition of customers. It's a clear advantage of migration. On the other hand, logistics can be a challenge. The ticket of these products is slightly lower. Fred, what about economics of your Marketplace, considering this migration for more frequent items with lower ticket?
Thiago, thank you for your question. I think your question is very timely, not only for Marketplace, but also 1P. 1P, part of the market. We are selling our inventory. Low ticket. The secret behind e-commerce is price over volume. The higher the price, the lower the cubic meter, the better the logistics will be. The diamond is the best product to be sold by e-commerce because you have shipping fee over the price of the product, which is low. The shipping cost is a fraction of the cubic volume. That's the secret. If you have low price, and sometimes you have a lot of cubic meter, you have a serious problem in e-commerce. The secret is to be hyperlocal.
My view of logistics chain is closer to China than the logistics U.S. long haul view. Amazon, for instance, buying airplanes with huge fulfillments. There, the aircraft and flight network, you can do these long moves. Not so efficient, at least more efficient than Brazil. In Brazil, if the product has to travel too much, you have a serious problem in results because the cost of shipping and freight will be too high. My vision to implement locally is based on what I saw in China, which is the short haul, the right product, right place. My bet is more strongly in a hyperlocal chain privileging the inventory. There are many complex things about geolocation. There is a little bit of long haul, but benefiting from the local inventory to sell to locals and make these goods travel less.
That's a very different approach compared to what I see with some players in Brazil. That's where I place my bet. We still have a long way to go. We could have one hour just to talk about this topic. I want to sell the product that is closer to consumers. Naturally, it takes a lot of infrastructure, IT. Fatala's team is doing an amazing job. They have a great team at Labs, and it's very complex to make things simple down the road. Parceiro Magalu is going to bring inventory from the analog local world into our platform.
The super app, the advantage of the super app is that you know the place where the person is, and you can have the product exposure accordingly. The chain is fully tied to make the product available, the product that is closer. The secret is to have low ticket products with interesting logistic costs and making the product travel less.
Great. Thank you for your answer.
Thank you.
Olívia Petronilho from J.P. Morgan.
Good afternoon. Thank you for the question. I have three questions. One has to do with the short run. When we look at the stores still closed, of course, there is a cost. Can you tell us the monthly cost of your operating the company with this situation? The other one has to do with Netshoes and Zattini. How much total GMV, how much is growing? The other one is a long run question. Do you see any possibilities for M&A during the crisis? Do you think there will be new opportunities for acquisitions in the market? Thank you.
Thank you, Olívia. Three very different questions, I would like to ask Beto to answer your first one. Beto, could you talk about this quarter and relate it to the first question ?
Olívia, g ood afternoon, and thank you for the question. It's difficult to answer without giving you guidance. What we can say is that in physical stores, most of the expenses are fixed. In the physical stores, they are personnel, and rent, and other expenses related to occupancy, and the percentage of marketing and shipping is less than online. Online marketing and shipping are much higher. Most of the expenses are variable, differently from the fixed of the brick-and-mortar stores.
If you break down our SG&A based on our sales and these indicators, maybe you can get to the cost of the brick-and-mortar stores. E-commerce is growing, it is evolving in all aspects that we mentioned. The physical stores have this scenario. They were closed in most of April, and they are gradually being reopened in May with a good sales performance. We still have many stores that are closed. In terms of fixed expenses for all retailers that have physical stores, this is difficult because of the situation.
So we try to convey this message during the presentation. There is no magic trick. You can have creative accounting or reversal provision or something non-recurrent, but recurrent, as we make decisions, for instance, now of not laying off anybody in the next quarter, probably all of them will be opened. It would be nonsense to have layoffs and then having to contract or hire people afterwards again. We have the capacity, we have the necessary cash. We are going to hold on to this, and we are going to report this in a very transparent fashion.
There will be an impact on our result, of course, because you will see this in our management report, and this has already impacted, as you can see, the first quarter of this year. The contribution margin of a physical store, Olívia, is high. You can do the math yourself. We made endeavors in terms of reducing expenses. We renegotiated our rents. We used the MP, the provisional measure. We have to give a contribution as well. 80% drop in the sales of physical stores. We cannot reduce 80% of the expenses. This would be totally impossible. You cannot pay zero rent, for instance, or zero salaries or 80% reduction in salary. We decided to hold this back in spite of it being a more difficult quarter. It's going to be a difficult quarter now.
You have to expect a difficult quarter in terms of bottom line. Top line, much higher than we expected. I want this to make very clear, related to Netshoes, I would like to give the floor to Marcio. All over the world, including online, the categories that he works with are suffering in terms of the home fitness market. Categories as a whole, they are not growing the same proportion. 3P is very good, 1P growing more than the market numbers, but higher than the plan that we had. With a very good balance in all senses, margin, et cetera, and he's going to talk about that. I'm very comfortable and very pleased with the work being done by the Netshoes team, but, Marcio, I would like to ask you to answer.
Good afternoon. Ever since we came on board, we are working a lot for integration and giving a highlight about the integration. The back office areas are going very well, very smoothly. In June, we have an important point, which is the unification of the DCs, and with that, Netshoes will be gaining logistic capacity of all the DCs. This is going to make a lot of difference in terms of logistics, as Fred said, as far as we are concerned at Netshoes. Also the back office migrating slowly and getting together with the Magalu team. We have a very strong plan so that in the third quarter, from the third quarter on, we may really make a difference at the bottom line. Talking about the GMV, both Netshoes and Zattini are growing, and also we intend to put all our expertise within magalu.com.
As Beto said, we had been growing higher than the market, and when the pandemic hit, we had a drop, but we have already recovered from this drop, and we have re-accelerated in Net as it was a very beloved brand. We are very happy with this acceleration, the recovery of the pace, and the margin that is going up because of the good negotiations and the partnerships that we have with the most important brands, and Net having the bigger share. On the other hand, our products are practically all replicated in magalu.com, almost all the brands in Zattini and Netshoes . Many brands coming on board on Zattini and Netshoes at the moment when the physical stores are closed. During the presentation, we showed you important brands, and we have the magalu.com selling in Netshoes , which is big news.
Almost 6,000 products reinforcing and all part of the integration. We see an acceleration of GMV and at the same time an increase in our margin, top and bottom as well.
Thank you, Marcio. About M&A, of course, there's nothing we can tell you about our intentions. Once again, we try to preserve cash in order to be prepared for the opportunities that will arise in the market. The digital profile companies, they were not devalued. Quite the opposite, they have appreciated. We do not see a mega deal in a radar screen, but maybe there will be some other assets that might help us, companies that are not so digital but could give us a contribution in the future. I cannot give you any hints, but we are ready to make intelligent acquisitions, such as was the case of Netshoes.
Thank you very much. Very clear.
Thank you.
Richard Cathcart, Bradesco.
Good afternoon. I have two questions. First, about the 3P logistics. You already have 20% cross-docking. You got to this number very quickly. What about the remainder of this year? Fred, you said that 1P is growing very strongly as well, this could be a limitation, how do you expect this to evolve over the remainder of the year? The second question has to do with the market category. I would like to know about the consumer behavior in this category. Are they trying to set up a basket or are they buying products individually? About having the products at the stores for ship from store, have you done this only temporary because of the COVID crisis, do you intend to keep it this way?
Richard, good afternoon. Thank you very much for your questions. They are very relevant. As I said before, as I said during the presentation, from 0 - 20, it was a very big job done by the teams. I would like to be at another level. I think this is super important, and it's very important to share the Magazine Luiza with our sellers. 20% is a figure that does not satisfy us here, but it was possible because we had this boom in sales, and we grew very fast.
We had to build capacity for Magazine Luiza, mainly Logbee, and this is being consumed by commerce and part of it of sale, and we have to protect this. It is simpler now to execute. I really cannot tell you from now on about the growth dynamic and to which extent this will be when all the commerce is open again.
It's very hard to foresee and to be precise. If the acceleration continues to be the same, it will be difficult for us to increase these 20% significantly in the short run. I'm very honest and very pragmatic. If we continue to see this growth pace, it will be very difficult to go much beyond 20%. We do have a target. This is our intention, but we have to meet the capacity, and it's important for the company to generate cash. So many things involved, and we have to find solutions that maybe I do not have right now in order to explain to you differently from other players that are only marketplace, we have 1P. As far as consumers are concerned, they want the product to come to their home very quickly, regardless of being 1P or 3P.
In terms of our super app and our competitive advantage, it's a little bit different in terms of economics because at the 3P stuff there's a higher ROIC. For a strategy of growing and having a leadership in the formal market of e-commerce, I think our logistics is correct, and it can support us and give us this possibility of following this relevant growth in total GMV. In relation to market, the idea is to be at the stores, and we have to be at the stores and forever. It is here to stay. We are setting up the necessary structure at the stores in order to have the system in place. In 1P, we have a possibility of a leaner, 1P SKUs and a profile more wholesale than retail, with higher ticket, not so many items per basket.
Although we do have the development in the app, all the UX done by our products team and the Labs team, Edu's team and everybody's, Cassiano and Paulo, improving UX. This is a very good experience today already. It still has a lower number of items per basket, and we want to supplement this with 3P, and we will have a different experience there. There are some challenges how to put together 1P with 3P, but our team is very creative, and I think they will find the necessary solutions to conciliate and to put these things together. It will be a combination of 1P of store, of the stores, current stores with 3P. If we need to increase the stores and have more storage area, we are discussing this.
Today, we do not need this yet because we have a very lean line, I have some images to give you as well. We can show you the stores in this new model, you can see this. Okay, I can show this.
Thank you very much.
Next question, Ruben Couto, Santander.
Good afternoon. Could you tell us more about the behavior for this acceleration in April, May? There was a first move to increase demand for specific products like home office. In May, it changed owing to this high demand of new customers and the acceleration of new categories available. Any insights on the levels of accelerations to understand what is a trend or just transient? Thank you.
Ruben, thank you for your question. I'll answer your question based on my opinion. I have Magalu data but not market data by category at the level I wish I had to give you a more scientific base or more fundamentals. What is my opinion right now? Firstly, facts. The market of office migrated to one. You have many people buying physical stores and now buying online. Online, Magalu's share is higher than offline. I have more competitors, small, local, regional players, and only in one category, which is electronics and home appliances. Even in that category, half of the market is small and mid-sized, you have more options there. When the guy goes online, they have few players, three platforms, three or four larger platforms for the guy to buy. Magalu has a higher share online than offline.
Migration from offline to online, overall speaking, explains part of our sales growth. More people buying online. My share in online is greater, naturally, the growth happens at a higher rate. Our share is a fact. High share online.
With regards to categories, if you think about Alibaba's results published on Sunday, this is so interesting. You will see that there was a slowdown in the quarter because it was the peak of the pandemic. Unlike ours, we accelerated even more than Alibaba in our online. I think we have a lower digital rate. Migration was different. If you focus by category, and they had a disclosure in their reports, the best performing products were supermarket, both home care, personal care, and electronics as well. They mentioned several times in the release that electronics performed greatly. My theory is that, for instance, there is a universe that is limited to your home today. You will be in entertainment at home. You're eating more often at home. You're studying at home. You're working at home. Your home is your universe today.
In that universe, you need the right products and tools to work with. You have five people at home. I know many people who bought five notebooks because the husband and the wife are working from home, and the three kids are attending classes online. Everybody needs a computer. Everybody had to do his own share. People are entertaining via streaming channels, and lives are popping up. Everything at home. It takes investments. You have to cook at home. You need a stove, a fridge. There is a boom in countries that are going through the pandemic. Home appliances, everybody thought they were not so important. They are nearly staples today. I would say that today they are important. Well, if you think about fashion today, I'm speaking of published data of a Chinese company that I've been following on.
However, this is just intuition. It's a theory. No evidence in practice. I think we have to wait a little. We have evidence based on our numbers only.
Clear. Thank you. Thank you, Fred.
The next question is from Daniela, Eleven Financial.
Good morning, everyone. Good afternoon. We've been here for a while. Fred, the first question is addressed to you. Fred, what's your opinion about the strategy, Magalu's strategy, considering the high complexity of the pandemic? Because it brought some constraint at the store level, like you said before several times during the call. How do you envisage Magalu's ecosystem with this additional level of complexity? That's the first part of the question. I have another question for Roberto about Luizacred.
Hello, Dani. It's a pleasure to answer your question. Good afternoon. I believe the store will have to have an even more significant role for the ecosystem. The current role is important in store pickup and also in ship from store becoming more and more significant. I think there is room for more. It can have an even more significant role for 3P. That's what I usually say. I believe, I imagine it will be just like those XP self-advisor. That's the role of being like a hub in the micro region, a hub to the platform. That's the best example I can give right now. The store is as significant as you have these advisors for XP. That's a general question or answer, just to give an example. Stronger in the ecosystem, not only as a sales channel, but an important part that contributes to the whole.
This thing about having independent parts being together, I think it has to be accelerated. I wouldn't say it is more complex. I hate complexity. Maybe it's something fuller, more complete to the system as a whole.
Has it changed? Do you think it would inevitably happen regardless of the pandemic, or did it take some adjustments to the strategy?
I wouldn't say it changed. However, it greatly accelerated the need. Many things are projects that are still ongoing. The vision is stronger in the current context, in the sense of turning it into more relevant to the ecosystem as a whole, and not only slightly irrelevant and isolated. This time, more integrated to the ecosystem. The pandemic accelerated it. I wouldn't say it changed it. It made the rationale more intense.
Got it. Roberto, my question is about Luizacred. I was positively surprised. I even thought, or I thought that Luizacred's performance was good this quarter, particularly when we compare to what happened at Renner or Carrefour. In other words, we did have a robust growth in the portfolio, and even the on-and-off performance of LuizaCard. There was not a need to make more provisions or stronger provisions. What about the second quarter? You said that this quarter was very challenging, what level are we speaking of in terms of adjustments at Luizacred?
Hi, Dani. Good afternoon. Thank you for your question. Luizacred was going through an improvement process. There was a trend to improve the results since early last year. Like I said, it increased a lot with many new customers, the margin became more mature.
By the end of the year, the result began to improve, go back to better levels, more similar to the historical figures. This year it was about to continue or to follow this trend. When you look at the result in the first quarter compared to the first quarter of last year, the bottom line was better. It should have been much better. It was only slightly better because last year it was negative. For the future, the trend in the industry is to get worse. Today, provisions are already very high. IFRS, BRL 1.6 billion provisions, about BRL 900 million overdue portfolio, 175% coverage index. The point is that Luizacred's result or any consumer operation, if you think about it now, the drop in concession brings down revenues and sales.
Everybody will have a slowdown curve, just as we see with physical stores. Maybe a little bit milder, but the impact is still there, affecting results, and also the impact of the difficulty, the hard time for customers to pay. We're trying to minimize it with all the actions that we're mentioning and reopening the stores. Even when stores or where stores are open again, performance is not back to normal yet. If I could give you a range, just to give an idea. When it comes to receivables, the percentage of receivables vis-à-vis what we expected in April, for instance, was 90%. In May, it is close to 94% or 95%. It's not about the total. Some customers didn't pay, some asked for additional funding, et cetera. It's just to give an idea.
May is better than April, not 100%, which is what we had before the crisis. We still have some level of efficiency, and we don't have all the stores reopened yet, and it made a difference. Anyway, we have to welcome the customer, try to help him minimize any impacts. We are getting all the stores involved in the process to improve our service in terms of reminding customers to pay and just the physical stores. The second quarter will be still difficult and slightly better in the following quarters, trying to go back to the same track. Once again, I believe the good news is just for a short time frame. For Luizacred, in the long run, we are going to move away from this crisis even stronger than before, more digital, more connected, et cetera.
Great. Thank you.
Thank you.
We have come to an end of our Q&A session. I would like to give the floor back to Frederico Trajano for his closing remarks. Thank you.
I think our call has already been quite long. I would like to thank you very much for your patience. You have been with us for a couple of hours already. I would like to thank our people in the back office and our financial team that gave us our presentation and our accounting team, everybody who have contributed, plus the 35,000 employees of Magalu who are like all Brazilians suffering and languishing because of this pandemic and all the consequences of the pandemic. We are now adjusting the sails of our boat in order to continue in our trajectory.
I'm so thankful to everybody who works for us and very happy and very thankful for the performance that they are delivering. A lot remains to be done. We have already mentioned to you all our difficulties. There will be many, but not bigger than our confidence on our team. I have always said that my focus is to get Magalu to 100 years and very fit. It is not a focus on a year. It is a focus on the long run. We have already celebrated 63 years and we have a lot of room, a lot of time until we reach 100. Thank you very much.
Magalu's conference call has come to an end. Thank you very much for participating and we wish you a good afternoon. Thank you.