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MercadoLibre (NASDAQ:MELI), Latin America's largest e-commerce company, is expanding its free shipping policy in Brazil, its top market, to attract more buyers amid intensifying competition. The company announced that products priced at 19 reais ($3.40) or higher will now qualify for free shipping, a major drop from the previous threshold of 79 reais ($14.15).
With Brazil generating over half of MercadoLibre’s e-commerce revenue, the move aims to counter aggressive pricing strategies from competitors such as Amazon (NASDAQ:AMZN), Sea Group’s Shopee, and newer entrants like Temu. Fernando Yunes, head of MercadoLibre's Brazil operations, said that nearly the entire site will now offer free shipping, although he declined to quantify the cost impact on the company.
To further enhance its competitiveness, MercadoLibre has also slashed logistics costs for sellers by up to 40% since late May. This strategic shift is designed to stimulate sales volume in price-sensitive categories where rivals, especially Shopee, are rapidly gaining market share.
Analysts from Itau BBA highlighted in a recent report that MercadoLibre’s increased shipping discounts specifically target product segments where Shopee has been expanding. The company appears willing to absorb higher shipping expenses in the short term in exchange for increased market dominance and customer loyalty.
By improving affordability and convenience for buyers while easing logistics expenses for sellers, MercadoLibre is positioning itself to solidify its leadership in Brazil’s fast-growing e-commerce landscape. The company’s aggressive approach underscores its commitment to staying ahead in a market where low prices and free shipping have become key competitive differentiators.
