A little less Brazil, a little more Mexico
As more Latin Americans turned to online shopping due to the pandemic, Mercado Libre’s dynamics in the 18 markets where it operates changed accordingly. Brazil still accounts for most of the revenue generated by the company, but its share has declined compared to 2019. Meanwhile, Mexico and its home country, Argentina, have increased their contribution to Mercado Libre's revenue. Still, it is in Mexico that competition tends to be stiffest. That is due, in part, to the high amount of Mexican consumers who buy online from U.S. websites and their proximity to one of Mercado Libre's main competitors, Amazon.The race to deliver is on
The growing demand for online shopping triggered by the pandemic brought urgency to a persistent problem in Latin America, logistics. Realizing the online shopping game is also a race to deliver, e-commerce companies have been increasingly investing in logistics and transportation across the region, seeking to reduce costs and delivery times within and beyond its borders.In addition to opening four new distribution centers in Mexico in 2022, bringing the total to 11 warehouses in Mexican territory, Amazon expanded its distribution center network in Brazil from one to 12 locations between 2020 and 2022. Stepping up to the competition, Mercado Libre invested 17 billion Brazilian reals – about 3.4 billion U.S. dollars – to strengthen its logistics network in Brazil and planned a 1.6-billion-dollar investment in the Mexican market by 2023.
