Business

Mercado Libre doubles revenue (again) and sees its financial arm account for a third of its income

CFO Pedro Arnt said that the company wants to be the "standard checkout for merchants in Latin America"

Mercado Libre was one of the major players to take advantage of the third VAT-free day in Colombia
Photo: Shutterstock
Ler em português

Mercado Libre more than doubled its revenues (again) in the second quarter of 2021, benefiting from its focus on Latin America, the region where e-commerce is growing the most in the world, still in the wake of the effects of the COVID-19 pandemic. The largest Latin American e-commerce and payments company announced this Wednesday that it had a net income of $1.7 billion between April and June, up 102.6% over a year earlier.

The company also reported a net income of $68.2 million in the second quarter, up 22% from the previous year’s figure. The numbers reinforce the perception of experts that, even with the gradual resumption of physical retail in Latin America, as vaccination campaigns advance in the region, part of the migration of sales to online channels is here to stay.

READ ALSO: Arezzo buys My Shoes and joins with Mercado Libre to expand sales

The company’s CFO, Pedro Arnt, told financial analysts that Mercado Libre has the ideal “cocktail” to ride the wave of e-commerce in the region: ultra-localized experience, with a set of features that reinforce the platform’s predictability, such as the consistent increase in same-day or next-day delivery coverage via Mercado Envios, the company’s logistics arm, and the variety of payment options, including those most used in each country.

This last aspect is also linked to a key growth strategy of Mercado Pago, the payments arm of MeLi: in addition to the approximately 50 million users in Brazil and Mexico, the company wants to be the “standard checkout for merchants in Latin America,” said Arnt.

READ ALSO: Mercado Libre and Nubank in Time’s ranking of the 100 most influential companies in the world

Today, Mercado Pago accounts for 34.4% of the company’s revenues. In the second quarter of this year, MeLi’s financial arm processed $17.5 billion in payments, 56.3% more than in the previous year – of that amount, $10.3 billion was processed outside Mercado Libre‘s platform, showing the potential of Mercado Pago beyond its parent company.

At the end of June, the total base of unique users of Mercado Libre reached 75.9 million, an increase of 47.4% in 12 months.

In the second quarter, Mercado Libre‘s sales volume (GMV) was $ 7 billion, an annual expansion of 39.2%, a movement led by Brazil, Argentina, and Mexico, three of the five markets where e-commerce grows the most in the world, according to eMarketer/Business Intelligence.

In Brazil, its main market, the company’s net revenue grew 101% in constant currency, representing 55.9% of total net revenue.

(Translated and co-written by LABS)

Get the best insights about Latin America market in your inbox