Mercado Libre launches its own brand of electro, bicycles and decoration items

Large retail chains face a difficult outlook. Between the recession, the devaluations, and the market contraction, the traditional companies (Garbarino, Frávega, Cetrogar, among others) have a giant ahead of them to compete. It is Mercado Libre, which today participates in the sector as an intermediary, and now buys and sells like the chains do and also manufactures for its own brands: Tedge (technology), Klatter (bicycles and tools), and Begonia (decorative items homey).


With the rise in online sales, these new Mercado Libre roles cause concern and even discomfort in many electronics manufacturers and also in specialized retail chains. "Very recently we began to develop a project that allows us to complement the current offer with high-quality products and competitive prices," said the company when asked about it.


In the same way, they also pointed out that "Mercado Libre buys products from well-known brands from both local and foreign brands and we have agreements with the main cell phone, TV, audio, computer, and gaming brands." In the midst of the pandemic, for example, they agreed to the exclusive sale of some Samsung lines and also Nokia (whose license is in the hands of the Fuegian manufacturer Solnik).


“On the other hand, like other large retail chains and marketplaces, we buy products from suppliers to sell on our platform as Mercado Libre's own brands. We are venturing into items such as electronics, home products, tools, and fitness under the Tedge, Begonia, Klatter, and Basics brands ”, they added.



Faced with this, businesses and manufacturers express their disappointment because they consider that "Mercado Libre is the one that manages the search algorithms of the platform", where chains and brands also have their own stores installed, "in exchange for a significant percentage of sales ”, a senior executive of the sector told the Economic.


From Mercado Libre they deflated any conspiracy theory. "This is a small project that is designed as a complement to the offer of our marketplace, and represents only 0.2% of the total value of the products sold," they remarked. In addition, they said that "within the platform, the products compete with the same rules and conditions as any other seller."


The truth is that Mercado Libre's own brands are taking off. The product catalog, on the other hand, is quite extensive. Tedge's shelf, for example, includes computers, televisions, cell phones, small household appliances, headphones, PC keyboards, audio equipment, laptop backpacks and even electric kitchen ovens and mixers, among many other items.


Under the Klatter umbrella, they offer a highly diversified catalog of bicycles (in parallel with the high global demand during the pandemic) and all kinds of tools, from drills to pressure washers. Within Begonia, the brand for home decoration, there are kitchen items (set of suitcases or saucepans), trash cans, picture frames, hangers, and night tables.


Mercado Libre ensures that the launch of its own brands is recent. In the industry, on the contrary, they trusted the Economico that they have been in the market for at least a year and a half. "What happens is that before the pandemic they had a very small participation," they maintain.


Mercado Libre's greater participation coincides with a very strong contraction in the general market (close to 50% in some categories, such as cell phones) and the phenomenal growth of eCommerce since the start of the pandemic, as well as the emergence of new competitors for commercial chains and international brands.


Precisely, this context full of difficulties led to the crisis of two of the main players in the sector: Garbarino and Ribeiro accumulate heavy debts, arrears in payments, closings of premises and unpaid wages, and are looking for an investment partner, who allow you to avoid bankruptcy.


In fact, a rumor spread in the industry that Mercado Libre at some point showed interest in buying Garbarino, before being bought by Carlos Rosales, its current owner. And that he finally ruled out that possibility due to his financial red.

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