Argentinean e-commerce firm Mercado Libre will invest US$300 million in Mexico this year, as part of its renewed effort to garner a larger slice of the country’s lucrative online retailing market dominated by its American rival Amazon.
The online retailer grew four-fold in Mexico over the past two years, according to Galperin.
“We invested US$275 million in Mexico last year, and are investing US$300 million this year,” he added. The company hired more than 700 last year, is planning to add 1000 more people to its payroll this year.
Mercado is increasingly investing in storages and distribution centers, with an aim of cutting costs for both sellers and consumers. In addition, it is focusing on offering free shipping as part of its strategy to outwit competitors.
It is also generously lending loans to partners (sellers on its platform) in Mexico, where banking penetration is low. More than 8,000 Mexican entrepreneurs have borrowed from the online retailer, according to reports.
Mexico’s recent laws regulating financial technology are an advantage for e-commerce companies like Mercado.
It will launch a digital wallet allowing consumers to make payments through QR Codes, in addition to prepaid cards.
Mercado Libre has been locked in a compettitve race with US behemoth Amazon, enjoying twice as much website traffic in Mexico as its American rival in 2017, according to digital measurement company comScore.
For Mercado Libre, Mexico is the third largest market after Brazil and Argentina. The company also has presence in Chile, Colombia, Ecuador, Uruguay, and Venezuela.