LoyaltyOne nabs stake in Brazilian loyalty firm

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Alliance Data-owned company LoyaltyOne has acquired a 29% stake in CBSM, Companhia Brasileria De Servicos De Marketing, which operates Brazil-based loyalty program Dotz. Terms of the agreement, which was signed in early October, were not disclosed.

LoyaltyOne will transition Dotz, which is online-only, to a traditional coalition retail-based structure. Initial anchor sponsors for its retail program include Banco do Brasil, the country's largest bank, gas station chain Ale and SuperNosso, a regional grocer in the Belo Horizonte region. Dotz claims more than 200,000 active members and 50 online sponsors.

The company's goal is both customer acquisition, and transitioning existing customers to new programs.

Bryan Pearson, president of LoyaltyOne, said the acquisition is part of his company's strategy to create coalition loyalty programs in regions where they don't exist. He said the company looks for areas with three characteristics: a critical mass of people that can use the program, a well-established retail environment and a secure financial environment where consumers actively use debit and credit cards.

Pearson added that the two companies had been in discussions for about 18 months. LoyaltyOne is the first external shareholder of Dotz, which is a privately held firm.

“With 190 million people and an economy that's been doing well over the past few years, Brazil has a great ecosystem to launch this type of program,” he explained.

The company is first rolling out the program in the Belo Horizonte region, which has more than 4 million residents, in a phase that extends through next year.

“Provided we have the right level of success for constituents, sponsors and ourselves, we will continue to roll out the program into other regions with critical mass,” Pearson said.

Pearson added that the company is considering expansion into regions in Latin America and Asia, as well as underserved areas of the US.

“We also continue looking at the US marketplace which doesn't currently have a meaningful coalition program,” he continued. “We believe there will be one in the US in the future.”

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