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Latin American e-commerce and payments company Mercado Libre reportedly plans to invest a record $2.5 billion in Mexico this year, up from $1.6 billion in 2023.
Bloomberg reported on Friday (March 15) that the investments will be spread across various business areas, including expanding warehouses, strengthening the logistics network, increasing financing, paying salaries, and investing in marketing and technology.
According to a report, Mercado Libre’s head of Mexico country, David Geisen, outlined plans to strengthen the company’s e-commerce division, with the goal of operating more than 100 distribution centers by the end of the year, up from more than 90 currently. He said he is aiming to do so.
Geisen said in the report that high warehouse occupancy is a challenge, reducing the efficiency of finding and storing products. This expansion will allow the company to add more days of inventory.
Mexico has become an important market for Mercado Libre, accounting for more than 20% of its revenue in 2023, up significantly from 12% in 2019, according to the report.
Geissen is confident in Mercado Libre’s continued success, despite increasing competition, especially from Asian rivals such as Shein and Tem, the report said. He emphasized the importance of regulatory fairness, especially regarding taxation policies for certain imported goods.
Mercado Libre, also known as the eBay of Latin America, has grown over 25 years to become the second most valuable company in the region, with a market value of nearly $80 billion, according to reports.
The company plans to expand its workforce in Mexico, which currently numbers more than 12,000 people, with a focus on logistics, according to the report. The company has secured additional space in its Mexico City office.
The report said Geisen was recently promoted to senior vice president of commercial affairs for Spanish-speaking Latin America and is looking to emulate Mexico’s success in other countries. He pointed to the symbiotic relationship between Mercado Libre’s e-commerce and fintech businesses, noting that growth in one has a positive impact on the other.
PYMNTS Intelligence found that both e-commerce and digital payments are growing rapidly across Latin America. E-commerce is booming across the region, with digital payments replacing cash as the dominant transaction method, according to a PYMNTS Intelligence and Worldline joint study, “Global Commerce: Leveraging the $382 Billion Latin American E-Commerce Market.” It is said that it has the momentum to overtake it.
Among other initiatives in the region, Mercado Libre leverages artificial intelligence (AI) to provide consumers with a simple and intuitive online shopping experience.
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