MercadoLibre, which operates platforms for buying and selling goods across Central and South America, is eyeing an investment in Brazil next year that would be even bigger than its $716 million investment this year, Bloomberg reported.
“We’ve just started planning investments for 2021, and we want them to be higher than this year,” Fernando Yunes, the company's country lead for Brazil, said in a prepared statement, according to Bloomberg. “There has been a structural change in the market, and customers’ behavior is unlikely to go back to what it was before the pandemic.”
Bloomberg reported that MercadoLibre, which is based in Argentina and registered in the United States, has seen its market value rise to $61 billion — driven in part by the shift to online shopping caused by the pandemic.
A number of analysts have predicted that even when the pandemic is brought under control, a significant portion of shoppers will continue shopping online.
In Latin America, where 50 percent of people don't have bank accounts, finding a way to facilitate digital commerce is especially important, Paula Arregui, chief operating office of MercadoLibre's payments service, told PYMNTS.
“Open banking is undoubtedly the new paradigm toward which the most modern societies are advancing,” Arregui said. “However, it is not simply a technology or a regulation. It requires aligning different things, players, interests [and] information. So, in the region there is an inequality in terms of the acceptance and regulation of open banking. There are countries like Mexico and Brazil with clearer regulations that live in increasingly mature ecosystems, and [there are] other countries such as Argentina, Peru or Colombia, whose regulations are still in the perspective phase.”
Bloomberg reported that Brazil was the source of 53 percent of MercadoLibre's total revenue in the second quarter. The company's overall sales have increased 74 percent this year compared to last year and its marketplaces hit as many as 41 million users compared with 32.8 million on a peak day last year.
“We would like to achieve triple-digit growth at the upcoming Black Friday, as we’re investing three times last year’s amount,” Yunes said, according to Bloomberg.
To meet this goal, he said, the company is building its logistics capacity to be able to fulfill home orders in 75 percent in most cases.