MercadoLibre to almost triple investment in Mexico to $1.1 billion this year
April 6, 2021
By Daina Beth Solomon
MEXICO CITY (Reuters) -Argentina’s e-commerce firm MercadoLibre Inc said on Tuesday it will invest $1.1 billion to expand its warehouse space and services in Mexico this year, spurred on by a pandemic-driven boom in online shopping.
The figure is nearly triple the $420 million MercadoLibre spent last year in Mexico, a rapidly growing market where it is battling to stay ahead of global giant Amazon.com Inc and other rivals.
The investment will help MercadoLibre double its warehouse space and boost fintech services such as consumer credit, the company said in a statement, adding that it will create more than 4,700 jobs.
David Geisen, head of MercadoLibre’s Mexico unit, said the company decided to ramp up spending this year based on strong demand not only from shoppers, but also vendors that sell on its platform.
“If we don’t speed up (investment), we would have various bottlenecks,” he told a news conference.
Geisen added that he expected the company to post double-digit growth in Mexico this year, closer to pre-pandemic figures, after revenue grew more than 100% in the third and fourth quarters of 2020, year-on-year.
Mexico also exceeded MercadoLibre’s home market of Argentina in terms of items sold in the fourth quarter of 2020, and the company has steadily ramped up its Mexico delivery network, recently opening a fourth distribution center, a 60,000-square-meter site in the northern state of Nuevo Leon.
By the end of last year, MercadoLibre operated 210,000 square meters (2,260,421 square feet) of warehouse space, mostly on the outskirts of Mexico’s populous capital.
(Reporting by Daina Beth Solomon;Editing by Dave Graham, Marguerita Choy and Emelia Sithole-Matarise)