Mercado Libre Shares Drop Amid Heightened Competition in Brazil’s eCommerce Market

Heightened competition in Brazil’s eCommerce market reportedly drove shares of Mercado Libre into their biggest two-day slump since November.

The eCommerce and payments company’s stock fell 6.8% on Wednesday (Oct. 1) after declining 6.6% on Tuesday (Sept. 30), Bloomberg reported Wednesday.

The report attributed the two-day decline to Amazon Brazil’s announcement that it will waive or reduce Fulfillment by Amazon fees for certain sellers during the holiday season, and to Temu’s and Shein’s offering of “ultra-cheap goods” in the region.

Mercado Libre is the largest eCommerce player in Brazil and Latin America, continues to invest heavily in the region, and expanded its free shipping offer a few months ago, according to the report.

In an Aug. 4 earnings release, Mercado Libre said the expansion of its free shipping program in Brazil aimed to reduce friction in the country’s transition to online commerce and boost shoppers’ purchase frequency on its platform.

The company said the lower threshold for free shipping drove 34% year-over-year growth in items sold in June.

“Mercado Libre’s commerce business continued to outperform the broader market as ongoing investments in free shipping, user experience and assortment drove outstanding growth in Brazil, Argentina and Mexico,” the company said in the earnings release.

It was reported in April that Mercado Libre planned to increase its investment in Brazil by 48%, from about $3.7 billion in 2024 to about $5.8 billion in 2025, with a focus on logistics, technology, marketing and increasing its staff in the country by 14,000 to reach a total of 50,000.

The company’s investment in Brazil followed its announcement that it planned to invest $3.4 billion in Mexico, which is Mercado Libre’s second largest market behind Brazil. It did not disclose its plans for Argentina, where the company was founded more than 25 years ago.

On Sept. 22, it was reported that the company launched a new B2B unit in Argentina, Brazil, Chile and Mexico, moving its business beyond the consumer market it has traditionally served. The company said in the report that it began testing the unit a year ago and now has more than 4 million users enabled for wholesale purchases.