October 19, 2009, 12:00 AM

U.S. loyalty specialist buys a stake in an online rewards program in Brazil

LoyaltyOne today announced its acquisition of a 29% interest in privately owned Companhia Brasileira De Servicos De Marketing, operator of Brazil’s Dotz web-only loyalty program.

Katie Evans

Managing Editor, International Research

LoyaltyOne today announced its acquisition of a 29% interest in privately owned Companhia Brasileira De Servicos De Marketing, operator of Brazil’s Dotz web-only loyalty program. The deal is the first in a series of planned steps by the loyalty specialist to expand its business outside North America. Terms of the deal were not disclosed.

Through the Dotz program, 50 online retailers offer more than 6,000 product and service rewards to nearly 2 million consumers participants, of whom more than 200,000 actively use the program, the companies say. LoyaltyOne and Dotz say they hope to expand the program to bricks-and-mortar retailers.

LoyaltyOne and Dotz plan to launch a pilot program this week fashioned after the LoyaltyOne-operated Air Miles Reward Program in Canada, which has more than 9.5 million participants and more than 100 business and retail sponsors.

Despite dramatic demographic differences between Canada and Brazil, LoyaltyOne president Bryan Pearson believes the Brazilian program can achieve success comparable to that of the Air Miles Reward Program. “While there are 190 million people in Brazil, we’re really only targeting about 40 million who fit into our demographic,” he says. “But of that demographic, we believe that within three or four years we can get between 40% and 60% of the market participating. That does, however, depend on our partners.”

The pilot, which launches in Belo Horizonte, Brazil’s third-largest metropolitan area, will feature 13 new Dotz sponsors, including a national bank (Bacno do Brasil), regional grocer (SuperNosso) and national gas station chain (Ale). Throughout the next year, LoyaltyOne hopes to add cellular phone providers, pharmacies and other national or super-regional players, says Pearson. The pilot is scheduled to run through 2010.

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