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MercadoLibre investments in Brazil this year to top initial forecast

Published 06/05/2024, 03:03 PM
Updated 06/05/2024, 03:06 PM
© Reuters. FILE PHOTO: Founder and CEO of e-commerce platform MercadoLibre Marcos Galperin speaks during a news conference in Mexico City, Mexico April 26, 2018. REUTERS/Ginnette Riquelme/File Photo
MELI
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By Andre Romani

CAJAMAR, Brazil (Reuters) - Latin American e-commerce giant MercadoLibre (NASDAQ:MELI) expects its investments in Brazil this year to exceed the 23 billion reais ($4.35 billion) initially planned due to higher-than-expected sales, local marketplace head Fernando Yunes said on Wednesday.

He told reporters the revised capital expenditure plan cannot be fully disclosed at the moment as it is still in the works, but noted the firm now forecasts to hire 11,000 people in Brazil this year, up from a previous estimate of 6,500.

"Our growth was very strong in the first quarter. We have been seeing growth above what we planned," Yunes told reporters during an event at the firm's Cajamar logistic center. "This creates these two implications: more resources and staff".

MercadoLibre intends to allocate part of the new staff in two new distributions centers it plans to open in Brazil this year, in the city of Porto Alegre and in Brasilia, the capital, Yunes said.

Until now, MercadoLibre had only revealed its intention to open one Brazil distribution center, in Recife. It has over 20 distributions centers in Latin America, about half of them in Brazil, its main market.

Chief Executive Marcos Galperin said the new forecasts apply for Brazil and not other markets, but said the company has seen very strong growth in other countries where it operates.

MercadoLibre posted in May a 71% increase in its first-quarter net profit from a year earlier, beating analysts' estimates driven by its performance in Brazil and Mexico.

At the event, MercadoLibre said it has started to roll out a new strategy to make its distribution centers more efficient, using robots from China-based Quicktron to automate the process of picking products before packaging them.

As a result, the majority of products in the distribution center could potentially be shipped by about 30 minutes to one hour earlier than usual for same-day deliveries, Agustin Costa, senior vice president of shipping business, said.

© Reuters. FILE PHOTO: Founder and CEO of e-commerce platform MercadoLibre Marcos Galperin speaks during a news conference in Mexico City, Mexico April 26, 2018. REUTERS/Ginnette Riquelme/File Photo

The company has been expanding the strategy into one of the centers in Cajamar, near Sao Paulo city, and intends to reproduce it in other centers and countries, the executives said.

($1 = 5.2849 reais)

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