Mercado Livre buys 100% of the Kangu delivery platform By Reuters


© Reuters. Free Market Logistics Center in Greater São Paulo. Disclosure/REUTERS.

By Aluisio Alves

SAO PAULO (Reuters) – Mercado Livre (NASDAQ:) (SA:) announced on Tuesday the purchase of 100% of the Kangu parcel delivery platform, expanding its bet on its own logistics as a differential in Latin America, one of the regions where e-commerce grows the most in the world.

The transaction, for an undisclosed amount, takes into the Mercado Livre the structure of around 5,000 Kangu points spread across 700 cities in Brazil, in addition to Mexico and Colombia.

Created in 2018, Kangu uses small neighborhood stores as collection and delivery points for parcels, which expands the logistics network without the need to depend on third parties, such as the Post Office. Since last year, it has had Mercado Livre as a partner, whose demand for e-commerce has grown strongly since 2020, given the isolation imposed by the pandemic.

The acquisition comes after Mercado Livre announced earlier this month two new distribution centers in Brazil, one in Greater São Paulo, the other in Belo Horizonte (MG), using part of the investment planned for 2021, of 10 billion reais, to expand its geographic reach and reduce delivery times.

Other large e-commerce companies in the region, such as Magazine Luiza (SA:) and Cloudshop, also announced robust investments in logistics in Latin America, a region that could quadruple online sales in the coming years, reaching percentages similar to those in China, where they represent nearly 50% of total retail sales, down from less than 10% here.

In the specific case of Kangu, Mercado Livre tries to close some gaps that became more evident with the explosion of e-commerce, such as the delivery of packages at alternative points, which can also be used for collection to serve a growing number of local sellers.

“In addition, these points can be used to return products, without customers needing to queue up at the Post Office,” Renato Pereira, New Business Director of the Free Market, told Reuters.

Kangu will continue to be led by the co-founders and current co-presidents, Marcelo Guarnieri and Ricardo Araújo, and will continue to serve other partners in addition to Mercado Livre.

“Our goal now is to increase the number of delivery and collection points, from the current 2,600 to 3,500 in Brazil by the end of the year,” said Guarnieri.

(Paula Arend Laier Edition)

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