MEXICO CITY (Reuters) -Argentina-based e-commerce giant MercadoLibre Inc is planning to double its workforce this year and invest $1.1 billion to expand its warehouse space and services in Mexico, spurred on by a pandemic-driven boom in online shopping.
The investment figure is nearly triple the $420 million MercadoLibre spent last year in Mexico, a rapidly growing market where it is battling to stay ahead of global giant Amazon.com Inc and other rivals.
The investment will help MercadoLibre double its warehouse space and boost fintech services such as consumer credit, the company said in a statement, adding that it will create more than 4,700 jobs in the country.
The company, which has a market capitalization of around $75 billion, also said on Tuesday it would add 16,000 new jobs around the region this year, doubling the size of its team. The company’s shares soared last year but have dipped in 2021.
David Geisen, head of MercadoLibre’s Mexico unit, said the company decided to ramp up spending this year based on strong demand not only from shoppers, but also vendors that sell on its platform.
“If we don’t speed up (investment), we would have various bottlenecks,” he told a news conference.
Geisen added that he expected the company to post double-digit growth in Mexico this year, closer to pre-pandemic figures, after revenue grew more than 100% in the third and fourth quarters of 2020 year-on-year.
Mexico also exceeded MercadoLibre’s home market of Argentina in terms of items sold in the fourth quarter of 2020, and the company has steadily ramped up its Mexico delivery network, recently opening a fourth distribution center, a 60,000-square-meter site in the northern state of Nuevo Leon.
By the end of last year, MercadoLibre operated 210,000 square meters (2.26 million square feet) of warehouse space, mostly on the outskirts of Mexico’s populous capital.
MercadoLibre has previously said it would spend almost $1.8 billion in Brazil this year. It has not disclosed overall investment plans for the region.
Reporting by Daina Beth Solomon; Additional reporting by Adam JourdanEditing by Dave Graham, Marguerita Choy, Emelia Sithole-Matarise and Jonathan Oatis
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