Latin American eCommerce and payments firm Mercado Libre is reportedly set to invest a record $2.5 billion in Mexico this year, up from the $1.6 billion spent in 2023.
The investment will be distributed across various business areas, including warehouse expansion, logistics network enhancement, loan increases, salary payments, and marketing and technology investments, Bloomberg reported Friday (March 15).
David Geisen, Mercado Libre’s Mexico country chief, outlined the company’s plan to bolster its eCommerce division, aiming to operate over 100 logistics centers by year-end, up from the current 90, per the report.
The high occupancy rate in its warehouses poses challenges, reducing efficiency in finding and storing products, Geisen said in the report. The expansion will allow the company to add more days of inventory.
Mexico has become a crucial market for Mercado Libre, contributing over 20% of its 2023 revenue, a significant rise from 12% in 2019, according to the report.
Despite increasing competition, particularly from Asian rivals like Shein and Temu, Geisen remains confident of Mercado Libre’s continued success, the report said. He underscored the importance of regulatory fairness, especially concerning tax policies for specific imports.
Mercado Libre, often dubbed the Latin American eBay, has grown over 25 years to become the region’s second-most valuable company, boasting a market value of nearly $80 billion, per the report.
Now, the firm plans to boost its Mexican workforce, currently over 12,000 strong, with a focus on logistics, according to the report. The company has secured additional space at its office location in Mexico City.
Geisen, recently promoted to senior vice president of commerce for Spanish-speaking Latin America, seeks to emulate Mexico’s success in other countries, per the report. He pointed out the symbiotic relationship between Mercado Libre’s eCommerce and FinTech businesses, noting that growth in one positively impacts the other.
PYMNTS Intelligence has found that both eCommerce and digital payments are growing fast across Latin America. Across the region, eCommerce is booming, and digital payments are on track to overtake cash as the preferred transaction method, according to “Global Commerce: Harnessing the $382B Latin American eCommerce Market,” a PYMNTS Intelligence and Worldline collaboration.
Together with its other efforts in the region, Mercado Libre has also tapped artificial intelligence (AI) to deliver simple, intuitive online shopping experiences to consumers.
