(Bloomberg) — Shares of MercadoLibre Inc. are heading for their biggest two-day slump since November on concern that Amazon.com Inc.’s latest move in Brazil will ramp up competition in the e-commerce segment.

The stock extended Tuesday’s selloff, dropping as much as 5.8% on Wednesday to as low as $2222.52, its weakest intra-day level since May 7. That followed a 6.6% decline the prior session.

While analysts noted there was no single trigger for the decline, some pointed to a recent announcement by Amazon Brazil. The e-commerce giant said it will waive all Fulfillment by Amazon (FBA) logistics fees — including inbound, storage, and last mile — for every seller and take-rates on FBA orders for newly onboarded merchants, effectively making its marketplace free through the peak holiday season.

The selloff underscores investor unease over a tougher competitive landscape in Brazil, MercadoLibre’s biggest and fastest-growing market. In addition to Amazon’s push, Chinese platforms like Temu and Shein are also flooding the region with ultra-cheap goods, further disrupting price expectations.

“This represents one of Amazon’s most aggressive maneuvers to date, underscoring its determination to scale meaningfully in Brazil and contend head-to-head with both MELI and Shopee,” said Itau BBA analyst Rodrigo Gastim.

MercadoLibre and Amazon declined to comment.

MercadoLibre, Latin America’s largest e-commerce and payments company, still overshadows Amazon’s emerging presence in the region. The company processed nearly $200 billion in payments last year and shipped a record 1.8 billion items across 18 countries.

Brazil is the crown jewel of its operations. The company reached more than 100 million unique buyers in the country in 2024, while gross merchandise volume in local currency surged 69% from the prior year. And it continues to invest heavily in the region.

Amazon’s move comes only months after MercadoLibre expanded its free shipping to orders of 20 reais ($3.60) or more, a move aimed at encouraging users to shop on the e-commerce platform. Its logistics arm, Mercado Envios, delivered 56% of packages on the same or next day, powered by 19 distribution centers, an air hub with nine aircraft, and a last-mile fleet that includes more than 2,000 electric vehicles.

Even with its strong logistics lead, Amazon could narrow the gap, Gastim said.

“Speed translates directly into convenience and conversion, and while MELI retains a formidable lead in logistics infrastructure — its core competitive moat — Amazon continues to invest heavily to narrow the gap, curtail buyer waiting times, and enhance the customer experience.”

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