Argentinean e-commerce firm Mercado Libre has agreed to pour US$750 million into its operations in Brazil, as online shopping gains popularity in the South American country amid the travel restrictions imposed in response to the COVID-19 pandemic.
The expansion is estimated to create more than 5,000 jobs in Sao Paulo alone, and another 2,000 elsewhere in the country.
The online retailer is also hiring around 450 technology professionals by the end of this year.
“Mercado’s investment will be even greater next year,” tweeted João Doria, governor of São Paulo. Brazil is the main market for the retailer, as it represents around 56% of its net revenue.
Lock-downs and other travel restrictions have boosted e-commerce in Latin America’s largest economy. Online sales increased a record 41% in 2020, according to a survey by Ebit/ Nielsen. As a result, today, online sales account for 11% of the total sales in the country, an increase of 6% from 2020.
Meanwhile, Mercado’s US rival Amazon and local retailer Magalu, owned by Brazilian billionaire Luiza Trajano, are ramping up operations in the hope of capitalizing on the growing demand for online retailing.
Magalu is acquiring startups with unique technological assets, while Amazon is adding new distribution centers to its network.
However, Mercado Libre has maintained its leadership in the region, where it operates in 18 countries.