RIO DE JANEIRO, BRAZIL – The investment route of the Argentinian marketplace company ‘Mercado Livre‘ (Mercado Libre in Spanish, “Free Market”) in Brazil will include a new distribution center in Gravataí, Rio Grande do Sul State.
The company will operate in an area of approximately 50,000 square meters, in the metropolitan region of Rio Grande do Sul capital, Porto Alegre, within the logistics complex of multinational GLP, on the RS-118 state highway, where the Lebes, Ford, Yapp, and Flexul stores’ distribution centers are already installed.
The location is the third distribution center of the Argentine company in Brazil – the other two are located in São Paulo State, in the municipalities of Louveira and Cajamar. Operations in Gravataí are expected to begin in the first quarter of 2020.
According to Mercado Livre, the facility is part of the plan to expand the company’s logistics network to increasingly reduce the cost and delivery time of products that are sold on the mercadolivre.com.br portal.
In addition, according to the company, the new distribution center, as well as the other two existing ones, will operate with the Fulfillment service – a logistics model in which Mercado Livre is in charge of the entire process of stocking the sellers and delivering the products to buyers.
According to Gravataí’s Finance Secretary, Davi Keller Severgnini, the company’s expected revenue as reported to the city is R$450 million (US$113 million) in five years. But as the company will be installed in an existing logistics complex, the Mercado Livre investment in the city will essentially lie within the leased building.
“There is no great disbursement for implementation, but rather investments in adjustment of shelves and robots,” says Severgnini.
In the project presented to the city government, the company mentions some 2,000 direct and indirect jobs, which, according to Severgnini, should not only involve the city, but also professionals who will work on deliveries in Brazil’s three southern states.
In order to settle in the city, Mercado Livre was granted an IPTU (Real Estate and Urban Territorial Tax) exemption, previously granted to the entire GLP complex, in addition to the waiver of licensing fee payments and the guaranteed application of the minimum allowable ISS (sales tax) rate of two percent.
“Gravataí has a competitive advantage in terms of significant logistics, which certainly contributes to the choice for the city, which is linked to RS-118 and Freeway, for instance, which connects to [federal highway] BR-101, reaching the center of the country”, emphasizes the city’s Finance Secretary.
In a report published by Mercado Livre on October 31st, the company noted a 25 percent increase in the number of Brazilian consumers who are using the shopping portal, which explains the investment in one additional distribution center in the country.
During the third quarter of this year, Mercado Livre says it has reached an important historical milestone in its total volume of payments in Argentina and Brazil, which grew by 63 and 52 percent, respectively.