MercadoLibre plans a push into more cross-border trade

Wednesday 26 August 2020 12:40 CET | News

LATAM-based ecommerce company MercadoLibre has planned a new strategy to boost cross-border sales despite operating in a region notorious for trade barriers, tariffs, and red tape.

According to Buenos Aires Times, the company, which is now worth USD 60 billion in the stock market after a big rally during the pandemic, plans a push into more cross-border trade. Therefore, some pilot programmes have begun to expand shipments into the region, as the company is considering setting up distribution centres in the free-trade zone.

The initiative is part of a broader strategy to expand its logistics footprint, speed up deliveries, and reduce dependence on outside carriers, as the company will spend more than USD 500 million in 2020 on its logistics network, including warehousing and subsidised shipping.

Moreover, analysts reported that the stock is ripe for further gains, with a half-dozen companies raising target prices in August 2020, after the profit tripled in the second quarter. Therefore, MercadoLibre represents a valuable publicly traded LATAM company, with great potential for expanding to cross-border trade.

Furthermore, MercadoLibre spotted great opportunities of expanding in Mexico, Chile, and Colombia, as sales from international trade currently make up less than 10% of the total, with these countries that have relatively low barriers and lead the segment. Besides, the company already has hubs in five countries and plans to build two new sites in Brazil and Mexico, Buenos Aires Times, reported.

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Keywords: MercadoLibre, ecommerce, cross-border, free-trade zone, subsidised shipping, LATAM, Mexico, Chile, Colombia, Brazil
Categories: Payments & Commerce
Countries: Latin America
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