MercadoLibre Inc, the Latin America e-commerce and payments juggernaut, is betting big on Mexico this year with plans to invest a record $2.5 billion in the country.

The capital will be deployed across both key business verticals and include everything from adding warehouse space and boosting its logistics network, to increasing loans, paying salaries and investing in marketing and technology, said David Geisen, MercadoLibre’s Mexico country chief. The investment plan compares with $1.6 billion spent there in 2023. 

To support the growth of its e-commerce division, it will invest to boost its storage space in existing facilities and add to its logistics centers with plans to operate more than 100 by the end of the year from about 90 at the moment. 

“Our occupancy is well above what we had projected, and that poses challenges because it reduces efficiencies to find and store products in the warehouses,” Geisen said. “The expansion will allow us to add more days of inventory.”

Mexico is becoming a bigger part of MercadoLibre’s business, jumping to more than 20% of revenue in 2023 from just 12% in 2019. And while competition is growing, especially from Asian competitors such as Shein and Temu, Geisen said the business continues to boom with more overall consumers shopping online. Still, he called on regulators to ensure “a level playing field” for all players given certain imports aren’t taxed.

“For us, more competition is a positive trend,” he said. “Users will be able to compare the service: if the waits are several weeks or the same day. Our strategy is to continue to grow our logistics, our speed and our convenience.”

MercadoLibre, which was founded 25 years ago and was long seen as the Latin American equivalent of eBay Inc., has grown into the second-most valuable company in the region with a market value of nearly $80 billion.

The company is also planning to add headcount in Mexico, where it has over 12,000 employees. While most of the hiring will be focused on logistics, an additional floor has been taken at its Polanco office in Mexico City.

Geisen, who in January 2024 took an expanded regional role as senior vice president of commerce for Spanish-speaking Latin America, said he’s looking to bring the successes of Mexico to the rest of the countries under his purview.

“Both businesses are growing at full speed,” Geisen said. “And they’re also very interconnected, and that creates a lot of synergies. If the marketplace grows, that makes the fintech business systematically grow too. And vice versa.”