Mercado Libre Announces US$1.1 Billion Investment in MexicoBy Jorge Ramos Zwanziger | Thu, 04/08/2021 - 12:33
Mercado Libre, Latin America’s largest digital marketplace, just announced a US$1.1 billion investment in Mexico, a record number for the company in the country and 160 percent more than last year’s US$420 million investment, reports Immobiliare. The investment, announced during a virtual press conference, will be used to strengthen Mercado Libre’s logistical network and to promote fintech solutions, including Mercado Crédito.
“This year, we are investing more than in the last four years combined. We will invest US$1.1 billion and we want to keep developing our solutions so people are more connected and have even more financial inclusion,” David Geisen, CEO of the company, told El Financiero. The investment will help the company double the area of its distribution centers to about 210m2. The investment will also help the company to create 4,700 more jobs, according to Geisen.
Geisen explains that it is all a matter of strategy. “We are seeing a lot of growth and demand from consumers, SMEs and sellers who want to send more products to our distribution centers, which may at some point reach their limit. Projections show that the capacity to support this growth must accelerate … If we do not accelerate, we would face several operational and financial bottlenecks, so we decided to take this opportunity,” Geisen said to T21.
The investment comes at a time when Mexico has gone through considerable growth in e-commerce. In 2019, e-commerce in Mexico grew by 35 percent and last year it grew by 81 percent, reports T21. “The growth of e-commerce has accelerated by at least three years, and Mexico is the Latin American country with the greatest increase in activity, according to Kantar Worldpanel,” Ingo Babrikowski, CEO of Estafeta, wrote for MBN. Over the course of 2020, Mercado Libre experienced 120 percent growth after moving 100 million products, reports T21, while 10 percent of the company’s revenue in Mexico came from a credit initiative the company started back in October 2019, reported El Financiero.