How the small town of Extrema became a Brazilian e-commerce hub

In recent years, the small Brazilian city of Extrema has become one of the country’s leading logistics hubs, a trajectory only furthered by the pandemic and Brazil’s subsequent e-commerce boom. With just 37,600 inhabitants, the municipality to the south of Minas Gerais state is attracting retail giants from around the country and pulling the surrounding region’s economy up in the process.

Extrema’s success derives from the combination of two factors: its geographical location and local tax rules. Situated on the southernmost point of Minas Gerais state, the city is only around 100 kilometers from Greater São Paulo, Brazil’s biggest economic center and home to around 22 million people.

“Extrema’s location benefits our operations in two important ways: cost efficiency and time management,” says Fernando Gasparini, Via’s logistics executive officer, speaking to The Brazilian Report. Via owns popular retail chains Casas Bahia and Ponto Frio, as well as the e-commerce branch of supermarket Extra.

Being just a couple of hours away from Brazil’s largest consumer market reduces transport costs. This was particularly important earlier this year, as fuel prices saw massive increases. 

In addition, the short distance between Extrema and São Paulo also allows e-commerce players to focus on strategies that make them stand out in an extremely competitive environment, such as same-day delivery.

Equally, being situated in Minas Gerais — and not São Paulo state — means that interstate goods and services...