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Mercado Libre Reportedly to Invest $2.5 Billion to Bolster Growth in Mexico

Media reports that Mercado Libre, which operates in the sphere of e-commerce and provides payment services to consumers, plans to invest $2.5 billion in Mexico.

Mercado Libre Reportedly to Invest $2.5 Billion to Bolster Growth in Mexico

Nowadays, there is information according to which the mentioned firm will provide the specified financing during the current year. It is worth noting that in 2023, this company invested $1.6 billion in Mexico.

The media reports that the firm will distribute financing in various business areas, including the expansion of warehouses, the development of a logistics network, increased loans, and salary payments. Also, some of the money will be spent on investments in marketing and technology.

David Geisen, Mercado Libre’s Mexico country chief, announced the company’s plans to strengthen the e-commerce unit, which aims to operate more than 100 logistics centers by the end of 2024, compared with the current 90 corresponding facilities nowadays.

The high level of warehouse occupancy rate is the cause of the problems. In this case, the level of efficiency of product finds and storage decreases. The extension will provide Mercado Libre with the opportunity to increase the number of days of inventory.

Currently, the Mexican market is the most important for the company. In the earnings structure of Mercado Libre over the past year, the share of revenue received in the mentioned country is more than 20%. It is worth noting that in 2019 the corresponding figure was 12%.

David Geisen is confident that the further dynamic of Mercado Libre’s activities will be on a growth trajectory, despite increased competition, especially from Asian players such as Shein and Temu. He also stated the importance of fair regulation, particularly in the context of tax policy, for specific imported goods.

Mercado Libre is sometimes referred to as Latin American eBay. The company’s headquarters are located in Uruguay. Over the 25 years of its existence, the firm has come an impressive way, becoming the second most valuable in Latin America. Mercado Libre currently has a market value of almost $80 billion.

The company intends to increase the number of its employees in Mexico. Currently, the corresponding figure is more than 12,000 people. As part of the increase in the number of employees, according to media reports, the company intends to focus on specialties related to logistics.

David Geisen aims to emulate Mexico’s success in other countries. According to him, a symbiotic relationship has formed between Mercado Libre e-commerce and fintech business, noting that growth in one of these sectors has a positive impact on the state of affairs in the other.

Currently, the scaling of e-commerce and digital payment services is being recorded in Latin America. Currently, the value of the local e-commerce market is $382 billion. In this case, it means a cumulative indicator covering all Latin American countries.

Mercado Libre also uses advanced technology as part of its operations. The company has implemented artificial intelligence to provide consumers with a simple and intuitive method of shopping on online platforms.

As we have reported earlier, Alibaba Reportedly Plans to Invest $1.1 Billion in South Korea.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.