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Contxto – Mercado Libre has tagged huge, huge funds for Brazil. Specifically, R$4 billion (around US$920.5 million) to be used throughout 2020. That’s an additional R$1 billion more than what it used last year.
The purpose of this move is to scale its e-commerce’s delivery operations as well as the financial services Mercado Pago, its fintech arm, provides.
Mercado Libre’s Executive Vice President for Latin America, Stelleo Tolda, made the announcement last Monday.
Related article: The thriving Brazilian e-commerce market
E-commerce competition in Brazil
Tolda detailed that Mercado Libre is looking to cut down delivery times using these funds.
Reading between the lines, it sounds like other e-commerce businesses—cough Amazon cough—are winning a cut of the market through logistics speed. So naturally, the Argentina-based company doesn’t want to be left in the dust.
On the contrary. According to Statista, in Brazil, the most popular e-commerce retailer, based on its number of unique visitors is Sao Paulo-based B2W Digital with 78.7 million visitors in 2019.
Coming in a close second place is Mercado Libre with 69.6 million. Third (surprise!), it’s Chinese Alibaba with 31.8 million. Going further down the list, “Amazon sites” takes sixth place with 28.4 million visitors.
Although it’s important to point out that Amazon only began its direct sales operations in that country in January of last year. And Statista’s study was for March of 2019. Meaning, the number of hits Amazon got as of March was likely higher.
In other markets in Latin America, Mercado Libre is the preferred e-commerce site. Nonetheless, it has to keep moving if it wants to stay in the lead. And Brazil is the largest battleground in that sense.
Likewise, it wants to increase the financial services it offers. But for that to happen not only does it need a slice of those R$4 billion. Mercado Pago also awaits for the Central Bank of Brazil to give its nod of approval.
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