MercadoLibre Takes on Amazon Brazil With Casas Bahia Pact

That’s according to a report Thursday (Oct. 23) by Bloomberg News, which notes that this marks a new era of competition in the Latin American digital market, where Brazil is the region’s biggest economy.

The two companies have inked a long-term partnership making Casas Bahia’s main portfolio — including appliances, electronics and furniture — available on MercadoLibre’s platform, the report said, citing a regulatory filing.

This partnership allows MercadoLibre to counter recent moves by competitors in Brazil. For example, Amazon Brazil announced weeks ago that it planned to waive or reduce Fulfillment by Amazon fees for some sellers during the holiday season. And companies like Shein and Temu continue to offer significantly marked-down products in Latin America.

Citigroup analyst Joao Pedro Soares described the MercadoLibre-Casas Bahia pact as unexpected but positive, the Bloomberg report said. He noted it helps MercadoLibre with a long-time obstacle of sourcing third-party partners for heavy and bulky consumer electronics.

“Casas Bahia is a well-known brand and one of the largest players in the sector, but it had been struggling financially. We expect it will contribute with a sizable assortment of products,” Soares added.

The report said MercadoLibre and Casas Bahia will have access to each other’s logistics networks, with the partnership due to start next month, ahead of Black Friday.

“For big products, our logistics are better, while for smaller ones, MercadoLibre has more expertise,” Casas Bahia CEO Renato Franklin told Bloomberg.

The news outlet had reported earlier this year that MercadoLibre was planning to increase its investment in Brazil by 48%, from 23 billion reais (about $3.7 billion) last year to 34 billion reais (about $5.8 billion) in 2025. That investment was said to focus on logistics, technology, marketing and expanding its workforce in the country from 36,00 to 50,000.

Research by PYMNTS intelligence has shown that consumers in Brazil are among the most digitally engaged in the world, with people using their devices to do everything from banking to gaming.

Juan Soto, general manager of LatAm for Nuvei, told PYMNTS there are obstacles for merchants who don’t understand how consumers in the region behave, with granular insight into payment preferences and market-by-market differences that require a careful, calibrated approach to payments. Take a cookie cutter approach to eCommerce, he warned, “and you’re not going to be able to succeed in terms of acceptance rates or increased revenues.”