Sunday, May 19, 2024

Got 1 min? Amazon rival Mercado Libre to invest US $2.45B in Mexico in 2024

Mercado Libre, Latin America’s e-commerce and financial services behemoth, announced plans to invest US $2.45 billion in Mexico this year, its largest-ever expenditure in the country.

David Geisen, director general of Mercado Libre México, said the funds would serve to boost the company’s technical and logistical capabilities while also demonstrating its commitment to Mexico, Mercado Libre’s second-biggest market.

A Mercado Libre distribution center in Tepotzotlán, México state.
A Mercado Libre distribution center in Tepotzotlán, México state. (Mercado Libre México)

The company, founded in Argentina in 1999, will upgrade its logistics network, develop priority categories, invest in marketing and strengthen its Mercado Pago financial services product application.

“This continues the upward trajectory of our investments in Mexico dating to 2017 when, for the first time, we invested more than US $100 million,” Geisen told reporters at a press conference. 

Last year, Mercado Libre invested US $1.6 billion in Mexico, where it has 90 distribution centers as well as a fleet of 900 electric vehicles. 

Thursday’s announcement comes on the heels of a banner year for e-commerce in Mexico. Growth in Mexico’s e-commerce sector in 2023 was the highest in the world, according to the Mexican Association of Online Sales (AMVO). E-commerce profits in Mexico soared to 658 billion pesos (US $39.4 billion) last year, up 24.6% over 2022.

The company also saw the number of users soar in 2023, spurred by a rapidly expanding consumer base in Mexico. Mercado Libre reported 144 million active users across all of its platforms last year, a 50% increase over 2022. Total sales last year grew to 1.4 billion units, up 32% over 2022, and the company reported profits of US $1.2 billion in 2023, up 156% over the previous year.

Although Mercado Libre and its rival Amazon are confronting regulators in Mexico who accuse the companies of monopolistic practices, the threat of legal action has not negatively impacted stock listings. Mercado Libre’s stock price closed at US $1,550 on Wednesday and financial analysts project share prices will reach US $1,900 this year.

With reports from El Economista and Mundo Ejecutivo

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