In response to the rapid expansion of e-commerce in Latin America, Devolut, a Mexican startup, has developed a comprehensive solution for managing returns and refunds. The traditional reverse logistics process in the region has been plagued by inefficiencies, with unreliable carriers, high costs, and lengthy return times. Devolut aims to address these challenges by establishing a network of conveniently located return points and automating the entire returns process.
The state of reverse logistics in Latin America
The founder and CEO of Devolut, Agustin Shutte, describes the current state of reverse logistics in Latin America as a mess. Traditional carriers are unreliable, expensive, and slow, resulting in extended refund periods of up to 40 to 50 days. Devolut aims to change this by creating a network of return points, similar to Happy Returns in the United States.
Introducing Devolut’s end-to-end returns solution
Devolut provides an end-to-end returns solution that eliminates the need for boxes and labels. Customers can return their purchases to designated city points, such as pharmacies or convenience stores, where clerks will scan a QR code provided by the buyer. The item will be placed in a plastic bag, a preprinted return label will be scanned, and the item will be placed inside reusable bins. Devolut’s software automates the entire process, allowing for instant refunds in most cases.
A focus on AI and promoting exchanges
Devolut is not only addressing returns but also using AI technology to promote exchanges instead of refunds. By leveraging AI algorithms, Devolut aims to assist merchants in retaining more revenue. The company plans to generate revenue through a monthly software charge, a per-return charge for managing the returns process, and a percentage for upsells or cross-selling.
Government backing and growing demands
Devolut stands out in the market as the company has government backing for its returns ecosystem development. Latin American countries, including Mexico, Brazil, Argentina, and Colombia, have passed laws requiring merchants to accept returns for online purchases. Additionally, with e-commerce giants like Amazon and MercadoLibre setting high standards for post-purchase experiences, customers expect a seamless returns process from all direct-to-consumer brands.
Key Takeaway
Devolut aims to revolutionize the reverse logistics process in Latin America by providing an end-to-end returns solution and establishing a network of return points. With government support and increasing demands for a better returns experience, the company envisions significant growth potential in the region’s expanding e-commerce market.
Competition and funding
While several startups are working on solving the reverse logistics problem in Latin America, Devolut’s closest competitor is Reversso, a Chilean company focusing on software solutions. Devolut’s differentiating factor lies in its comprehensive end-to-end approach and the establishment of return points. The company recently announced raising $600,000 in pre-seed funding, with investors including Seedstars International Ventures and FJ Labs.
The future of reverse logistics in Latin America
Devolut aims to further enhance its returns and exchange algorithms using AI technology. The company plans to generate product recommendations and facilitate instant returns, eventually enabling refunds through its own digital wallet. Devolut is currently testing its tool with Sally Beauty’s stores in Mexico and sees immense potential for growth in Latin America’s booming e-commerce market.
