China wants more than Brazil’s soybeans

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It’s hard to overstate how much China matters to Brazil. In 2025, trade between the two reached US$171 billion, more than double Brazil’s trade with the U.S. That included US$55.3 billion in Chinese purchases of Brazilian agribusiness exports, more than the EU and the U.S. bought from the sector combined.

What’s far less obvious, especially from the U.S., is how important Brazil has become to Chinese and other Asian tech and consumer companies, from SHEIN and BYD to DiDi, Meituan, and Shopee. And how much their expansion can change the economics of established players like iFood and Mercado Livre.

And these are hardly easy companies to take on. iFood and Mercado Livre spent years building the distribution, customer relationships and local knowledge that helped them beat other foreign competitors.

So what makes this round of competition different?

Part of the answer lies in what it took to succeed at home. China’s domestic market has forced its companies to learn how to serve price-sensitive consumers at enormous scale, build the infrastructure to reach them, and survive prolonged fights over margins. Many of the challenges that make Brazil difficult for companies from established markets are problems Chinese companies have already solved at home.

Their expansion in Brazil offers five lessons.

Build the infrastructure that growth requires.

Factories, warehouses, delivery networks, servicing. Chinese companies are willing to take on the operational complexity that comes with making a product work at scale. That gives them more control over what it costs to deliver, where it’s available and what happens after the customer buys it. They build some of those capabilities themselves and bring in local partners for others.

BYD is a good example.

The company sold just 260 cars in Brazil in 2022. Three years later, it was selling more than 430 times that number—112,814 cars in 2025. And it took only eight months of 2026 to beat that, with nearly 147,000 registrations.

To get there, BYD had to make buying and owning one of its cars practical across the country. It worked with established Brazilian dealer groups to go from nine stores in October 2022 to more than 210 by March 2026. Santander helped customers finance their purchases, and BYD installed 125 publicly accessible fast chargers at dealerships across all five Brazilian regions.

And on top of that, it committed over US$1 billion to an industrial complex in Camaçari, Bahia, taking over the site Ford left behind in 2021 when it gave up on manufacturing in Brazil.

The assembly operation officially opened in October 2025. Just nine months later, it had already assembled 100,000 vehicles and employed 5,500 people. BYD was selling cars throughout the buildout, expanding its capacity while building demand.

It used established Brazilian businesses to move quickly while putting its own money into charging and local assembly.

By September, more than 8% of the cars and light commercial vehicles registered in Brazil were BYDs.

And Tesla—well, Tesla has never bothered to launch an official operation in the country. It has no stores, no service network and no chargers of its own. The few Teslas you might see on Brazilian roads came through independent importers.

And what’s even more staggering is that from 2022 through May 2026, only 157 Teslas were registered in Brazil. BYD registers more than that every few hours.

Shopee has been doing the same thing in e-commerce. Behind the inexpensive products and shipping coupons is a growing Brazilian logistics network.

By August 2026, Shopee said it had 22 distribution centers and more than 200 logistics hubs across the country. Some sort and route parcels. Others store sellers’ inventory, pack orders and dispatch them. Small merchants get access to an operation they would struggle to build themselves, while Shopee gets more control over how quickly those orders reach customers.

When it opened a fulfillment center near Belo Horizonte in May, the company said it would cut delivery times in the region by about half.

Shopee also found a way to expand without opening a location in every neighborhood. More than 3,000 local businesses across Brazil serve as parcel collection, pickup and return points. The shop earns extra income. Shopee gets local reach. Customers have somewhere nearby to collect or return a purchase.

That’s a substantial physical operation behind a cheap online order. And the more efficiently Shopee can move those parcels, the more room it has to compete on price and delivery.

Subsidize adoption until it becomes a habit.

Customer discounts, lower merchant commissions, driver subsidies. Chinese marketplace companies are willing to fund adoption across several sides of the business at once, giving everyone a reason to participate before there is enough activity to make it worthwhile on its own. The bet is that customers develop habits, merchants get repeat business, and more orders in the same area bring delivery costs down. As the business grows, it should need less subsidy.

When DiDi brought 99Food back to Brazil in 2025, it offered restaurants in São Paulo zero commission and no monthly fees for their first 12 months. In return, dishes were supposed to cost the same as they did at the restaurant counter.

99Food gave up its commission so customers could get a cheaper meal without the restaurant paying for the entire discount.

Then it paid to attract couriers. At its São Paulo launch, 99Food guaranteed R$400 (US$80) a day for completing 15 food deliveries during the first month. That works out to roughly R$26.70 (US$5.34) per delivery. At the time, iFood’s minimum payment for a motorcycle delivery was R$7.50 (US$1.50), before distance payments and incentives.

More than three times that floor. A temporary offer, but a pretty compelling reason to try another app.

Meituan’s Keeta went door to door. It deployed an army of more than 1,000 account managers in Brazil to sign up restaurants before asking consumers to download the app.

The restaurants got an offer worth considering. Commissions two to three percentage points below prevailing rates, payments within seven days instead of the conventional 30, and no early-payment fee.

For a restaurant with thin margins, getting paid three weeks earlier means money available for ingredients, wages and rent. And no extra charge for getting access to its own sales proceeds sooner.

By the time Keeta launched in São Paulo and eight neighboring cities in December 2025, it said 27,000 restaurants had registered on the platform.

Then it paid to bring them customers. Up to R$200 (US$40) in welcome coupons and free delivery at more than 90% of participating establishments, with Keeta covering 90% of that delivery cost.

Lower commissions alone won’t keep restaurants on an app with no orders. Customer coupons won’t help much if there aren’t enough restaurants or couriers. These companies are paying to make the whole service worth using from the beginning.

If it works, restaurants get enough business to stay, couriers spend less time waiting between deliveries, and customers start opening the app without needing another coupon.

That last part is the expensive bet. There’s a difference between becoming someone’s regular delivery app and being the one they use whenever it’s giving money away.

But iFood has to respond now.

Whether those customers stay with Keeta or 99Food once the discounts disappear is a question for later. Right now, they have a cheaper alternative, and iFood has to give them a reason to keep ordering through its app.

In May, Prosus, iFood’s parent company, told investors it would spend more on lower-priced meals, faster delivery and other products.

And it’s an expensive plan. iFood had just made US$400 million in adjusted EBITDA in the fiscal year ended March 2026. For the following year, Prosus told investors to expect US$100–150 million. Orders and transaction volume could keep growing while adjusted EBITDA fell by more than 60%, potentially as much as 75%.

That’s a lot of money to give up when you already lead the market.

Shopee is making life expensive for Mercado Livre too. It keeps giving shoppers discounts and coupons worth up to R$20 (US$4) toward delivery on qualifying orders. For someone buying a cheap household item, that can be the whole shipping bill. Why pay it on one app when another will cover it?

So in June 2025, as competition from Shopee, Amazon and other platforms intensified, Mercado Livre lowered its free-shipping threshold from R$79 (US$15.80) to R$19 (US$3.80) and told sellers it would cover most of the shipping cost.

Spend less than four dollars and get it delivered for free. You can see the appeal. By the second quarter of 2026, Mercado Livre was selling 56% more items in Brazil than a year earlier.

Great for the customer. Not so great for Mercado Livre’s margins. Covering more of the delivery bill helped bring in those orders, but it also contributed to the decline in the company’s consolidated operating margin, from 12.2% to 6.7%.

Win the customer, then win more of their spending.

Payments, account balances, credit. Chinese consumer platforms use financial services to extend the relationship beyond the original purchase or ride. Once customers can keep money in the app, pay bills and borrow, the platform becomes part of their financial routine.

With 99, you might start by booking a ride. Pay from your 99Pay balance and you get 1% cashback. Leave money in the account and it earns a return. You can also transfer money through Pix, pay bills, top up your phone and, if eligible, take out a personal loan.

That’s a product flywheel. Cashback gets you to use the balance, returns encourage you to keep money there, and bill payments bring you back between rides. By the time you need another car, paying through 99 is convenient.

99Pay advertises 22 million users. That’s a massive audience for a financial business that brings people in through ride-hailing.

And so, you might say, Uber has financial products too. But its broader banking offer, Uber Conta, serves drivers and delivery partners through Banco Digio. Passengers get Uber One credits toward future rides and orders.

99Pay goes further into the passenger’s financial life. You can download the app to get home and end up using it to pay your electricity bill.

Shopee is doing something similar through credit. By the first quarter of 2026, Monee, the financial-services business within Shopee’s parent company Sea, had more than US$1 billion in Brazilian loans outstanding. That was up more than 250% from a year earlier. Its installment-payment product, SPayLater, was already financing roughly 10% of the value of purchases on Shopee in Brazil.

The company attracting customers with inexpensive products and shipping coupons was now financing about one in every ten dollars they spent.

An approved credit limit makes the next purchase easier. As customers repay, Monee learns more about them and can decide whether to lend more. Sea describes using that repayment history to increase credit over time.

Then there’s ShopeeVIP. Its Brazilian subscription offers unlimited free shipping on eligible orders above R$10 (US$2), monthly coupons and priority support. Customers know the app, may already have credit available, and have paid for the shipping benefits. That gives them several reasons to put the next order through Shopee.

Brazil’s established leaders understand this too. By March 2026, 45% of iFood’s food-delivery volume came through its Clube loyalty program. And iFood Pago, its payments and financial-services business, brought in about a quarter of iFood’s total revenue.

So when a rival offers a cheaper dinner, iFood has more than another discount to offer back. Customers have subscriptions they want to use. Restaurants can turn to it for payments and financing. The more business they already do with iFood, the more reasons they have to stay.

Treat policy as part of the business model.

Tariffs, local-content requirements, investment incentives, competition rules. Chinese companies factor these into how they enter a market, where they manufacture and whom they partner with. They also work to influence the rules, negotiating tax relief, tying investment commitments to local jobs and challenging competitors’ restrictions in court.

For BYD, that meant fighting to keep a tax advantage while it built out its factory in Bahia. Much of the manufacturing still happened in China, with kits shipped to Brazil for local assembly. Those kits qualified for tax relief that fully assembled imported cars didn’t receive.

As Brazil raised import duties, keeping that relief became increasingly important to what BYD could afford to charge.

So BYD took the fight to Brasília.

In May 2026, its representatives joined Bahia’s governor in a meeting with Vice President Geraldo Alckmin to seek renewed tax relief for imported kits. Established automakers and parts manufacturers weren’t enthusiastic.

BYD argued that extending the benefits would keep electric cars affordable and accelerate adoption. Its competitors argued that the government was rewarding kit assembly at the expense of companies investing in more extensive Brazilian production.

In June, the government approved another six-month window allowing US$463 million of vehicle kits to enter duty-free. Other qualifying manufacturers could use the quota too, but it particularly suited BYD’s operation. Fully assembled imported cars got no equivalent exemption.

BYD had bought more time to expand local manufacturing without losing the tax advantage on eligible imports. Negotiating in Brasília had become part of keeping its prices competitive.

And BYD is not the only one who understands that the rules are negotiable.

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One gringo that understood this well was Uber. Its CEO went to Brasília to fight proposed restrictions, and the company helped push for the federal ride-hailing framework signed into law in 2018. Securing rules it could operate under was part of building the business.

Buy local reach, then expand.

An established brand, customer relationships, a network of drivers or merchants. Buying a local business gives Chinese companies a starting point that could take years to build themselves. They can bring new services to customers who already use the business and use its distribution to reach them. Each expansion still takes investment, but they don’t have to win everyone over from scratch.

When DiDi first invested in 99 in 2017 and took control the following January, it was buying a ride-hailing business. But the customers and drivers that came with it gave DiDi a head start in payments and delivery too.

By the time 99Food returned in 2025, it could offer restaurants access to more than 50 million existing 99 users. Those weren’t 50 million food-delivery customers. But they already had the app and knew the brand. While Keeta was persuading consumers to download something new, 99 could put food delivery in front of an audience it already had.

It could also offer couriers something a new food-delivery app would struggle to provide immediately. A full day’s worth of different ways to earn.

Where the services are available, a motorcycle rider can carry passengers with 99Moto, deliver parcels with 99Entrega and bring meals through 99Food. The company even shows riders how to fit them together. Passengers during the morning commute, parcels later in the morning, food at lunchtime, then passengers and dinner orders in the evening.

Lunch and dinner only fill so many hours. Passengers and parcels help fill the gaps, especially while the food business is still building demand.

That’s why one launch incentive offered R$250 (US$50) for completing 20 services in a day, with only five required to be food deliveries. Riders could keep doing the work they already knew and add a few meals to qualify. 99Food could attract riders without having enough food orders to keep everyone busy all day.

State Grid took a similar approach in electricity. The Chinese state-owned electricity transmission company entered Brazil in 2010 by buying seven businesses that operated transmission lines. That gave it an existing operation to build on.

It went on to win major transmission projects with Eletrobras, including a line carrying power from Belo Monte. Then, in 2017, it took control of CPFL Energia, adding electricity distribution and generation to its Brazilian business.

For both companies, the first acquisition was the beginning of a much bigger Brazilian business. What they bought locally helped them build what came next.

We’re used to measuring China’s importance to Brazil in soybeans, iron ore and the value of goods moving between the two countries.

We should also be studying how its companies enter markets and win business.

Across Africa, they have built much of the telecom network and major roads and railways. In Brazil, they have become major players in electricity generation and transmission, taken the lead in electric vehicles, and are expanding in online retail while challenging established players in delivery and payments.

Whatever you think of China politically, these companies are very good at things founders everywhere need to get right. Building distribution. Financing growth. Working with governments. Giving customers a reason to come back.

You don’t need their balance sheet to learn from their decisions.

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Endeavor Catalyst — has raised US$320M for its fifth fund, with Latin America expected to receive roughly a fifth of the capital.

The fund exceeded its US$300M target and brought Endeavor Catalyst’s assets under management to more than US$850M. More than 120 Endeavor entrepreneurs invested in the new vehicle, and Latin American investors contributed roughly 30% of the capital. Catalyst invests alongside other funds in companies led by Endeavor entrepreneurs. In Brazil alone, it has already invested US$55.7M across 30 companies.

→ Founders who built business with Endeavor's support are now helping finance the next generation. That's an encouraging development for a region where venture funding has historically depended heavily on foreign investors. More of the capital, experience and relationships created by one generation of entrepreneurs can stay in circulation for the next.

Asaas — has raised US$55.6M through a FIDC to expand financing for Brazilian small businesses.

The payments and financial-management platform structured the fund with Kanastra, raising approximately US$51.9M in senior capital and US$3.7M in subordinated capital. The money will finance receivables for its customers. About 30% of Asaas’s roughly 300,000 monthly active customers already use its credit products, which account for approximately 15% of revenue.

→ This reinforces what I wrote in my essay on FIDCs and who is really funding Brazil's fintechs. For a well-run fintech with paying customers and a lending business that works, a FIDC can bring in capital to finance more loans without issuing more equity. Asaas already has the customer relationships and payment history. This gives it more money to put behind a product those customers are already using.

Mercado Libre — shares jumped nearly 10% after the first round of Brazil’s presidential election.

The stock rose 9.67% on October 5 as investors reacted to the election results and the prospect of a more market-friendly political outcome. Brazil accounted for approximately 52.6% of Mercado Libre’s revenue in 2025, making the country’s economic outlook particularly consequential for the company.

→ A nearly 10% jump tells you pretty much everything you need to know about how investors felt about the prospect of a Bolsonaro win against Lula in the runoff. With Brazil accounting for more than half of Mercado Libre's revenue, that reaction is hardly surprising.

Alan — is reportedly looking at Alice and Sami as potential routes into Brazil.

The French health insurer has been exploring acquisitions in Brazil, with Alice and Sami among the companies under consideration. Reporting has put a potential Alice transaction at around US$400M, although no agreement has been announced. Both Brazilian companies combine health coverage with their own approach to coordinating care.

→ Health insurance is a business where entering a new country means rebuilding much of the operation. A product that works in France doesn’t arrive with Brazilian provider contracts, a local clinical operation or employee relationships. Buying an existing business could give Alan years of work in one transaction. For Brazil's healthcare founders and investors, it also introduces a potential buyer from outside the usual group of local insurers and hospital operators.

iFood — is reportedly in advanced talks to buy employee-benefits company Caju for roughly US$200M.

iFood already operates iFood Benefícios, which lets employers provide meal, grocery and other benefits to employees. It reports 65,000 corporate customers and 1.5 million users. Caju would bring another 70,000 corporate relationships and more than 1.3 million users, potentially nearly doubling the benefits business’s user base before accounting for overlap. The reported deal is valued at around R$1 billion (US$200M). Neither company has confirmed an agreement.

→ A couple of weeks ago, I did a deep dive in Brazil’s meal-voucher industry. Have a look if you haven't yet. And honestly, consolidation in this market has been a long time coming. As competition squeezes margins, spreading the cost of technology, compliance and customer support across a large customer base becomes increasingly valuable. Buying Caju would give iFood that scale without having to win those employer contracts one by one.

Jeeves — has raised US$110M as stablecoins become a growing part of its payments business.

CoinFund led the round, with participation from investors including a16z and GIC. Jeeves reports approximately US$5B in annualized payment volume, including US$1.5B running through stablecoin infrastructure. That stablecoin volume grew from zero in eight months. The company is also expanding its corporate-card offering from 25 to 35 countries.

→ Roughly 30% of Jeeves's annualized payment volume is already moving through stablecoins. Eight months ago, that business didn't exist. The customer still needs to pay a supplier, move money between countries or fund a corporate card. What's changing is how Jeeves moves that money underneath. I recently sat down with co-founder and CEO Dileep Thazhmon to talk about the round and what comes next.

Speaking at Asaas Connect in São Paulo next week.

I’m super excited to speak at Asaas Connect on October 14 at the Transamérica Expo Center. It’s a conference for entrepreneurs and business leaders focused on growing their businesses through technology, better financial management and smarter execution.

There’s so much that traditional, bootstrapped businesses can learn from how venture-backed companies acquire customers, test ideas and build for scale. You don’t need to raise a venture round to put those practices to work. And AI is making more of them accessible to companies with smaller teams and budgets. That’s what I’ll be getting into.

My talk is “Building in Brazil, Thinking Global: What SMEs Can Learn from Venture-Backed Startups.” I’ll be on the main stage from 10 to 10:40 a.m.

If you’re coming, come say hi!

Co-hosting a happy hour and panel with Jeeves.

I’m also getting together with Dileep Thazhmon and the wonderful Jeeves team to host a small gathering in one of the most beautiful spaces in São Paulo on October 13th.

I’ll be moderating a conversation on taking on multibillion-dollar industries with AI, joined by Dileep, co-founder and CEO of Jeeves, and Vitor Olivier, co-founder and CEO of Decade and former CTO of Nubank.

Both are building in industries where the established players have enormous resources and decades of customer relationships. I want to get into where they see an opening, what AI actually changes, and what it takes to get customers to trust a new company with their money.

Then we’ll continue the conversation over happy hour. If you’ll be in São Paulo and think you need to be in that room, reply to this email.

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