Business

Mercado Libre opens 5 logistics centers and doubles its capacity in Brazil

These new units are part of the company's BRL 4 billion investment plan for the country in 2020

Marcos Galperin, Mercado Livre's President in Brazil. Photo: REUTERS
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  • The new facilities increase the total of MercadoLibre’s logistics centers in the country from three to eight;
  • Units are within the investment plan of BRL 4 billion in the country for 2020.

Mercado Libre announced on Thursday the opening of five new logistics centers in Brazil in order to strengthen its structure after the rise of e-commerce in the country due to the COVID-19 pandemic.

The company will have three new warehouses in São Paulo (two in Cajamar and one in Guarulhos), one in Governador Celso Ramos, and another in Extrema. The new facilities increase the total of MercadoLibre’s logistics centers in the country from three to eight, doubling its logistics capacity in Brazil, which accounts for 55% of the total revenues of the Argentine-based firm.

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Of the five new units, which will start operating between this month and the beginning of 2021, four will be of “fulfillment”, with the sellers’ inventory all managed by the company, from storage to delivery. The e-commerce giant prefers to centralize the entire process to gain more productivity.

The new units, which are part of the company’s BRL 4 billion investment plan for the country in 2020, add 340,000 square meters to the company’s logistics network, which will reach more than 600,000 square meters. They are expected to create 13,500 direct jobs.

“This will help us to increase the volume of deliveries we make in up to two days in the country,” said the executive president of Mercado Libre, Marcos Galperin, in an interview with Reuters.

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The announcement underscores the growing commitment of large e-commerce companies that operate in Brazil to concentrate the entire process of collecting and delivering orders so that they are less dependent on third parties, including the Brazilian Postal Service, Correios.

On Monday, the American giant Amazon announced the opening of three more logistics centers in Brazil, strengthening its position in the country where electronic commerce had a great boost in the wake of the COVID-19 pandemic.

Magazine Luiza opened another 81 stores in the third quarter alone, betting on the integration of its structure since many customers use physical points to collect orders placed online.

Mercado Libre itself announced last week that it now has a dedicated fleet with four planes to deliver its orders, also as part of the effort to be able to deliver at least 80% of orders within 48 hours. The company also has 600 trucks and 10,000 vans.

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“We are having lower expenses with deliveries, including security issues, and we’re gaining productivity,” said Galperin.

The announcements of robust investments in logistics reveal the bet of these and other rivals that the share of e-commerce in the country, which rose from 5% to 11% of retail sales, will continue to advance, even with the easing of social-distancing measures.

(Translated by LABS)

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