Ingacio Caride
Director General
MercadoLibre México
View from the Top

Premier E-Commerce Provider Is Simplifying the Hunt for Vehicles

Tue, 09/01/2015 - 15:18

Q: What challenges have you encountered while convincing the Mexican population to use both MercadoLibre and Autoplaza to buy cars?

A: Ten years ago, a buyer would typically search through the newspaper’s classifieds section, which was neither the most pleasant nor the most time-efficient experience. Advertisements would normally contain minimal information about the product, making it more necessary for the buyer to engage to know enough to be interested. Advertising online is cheaper and much more efficient, and is undeniably further reaching than promoting in a used car lot. Today, sellers can list reams of information, providing prospective buyers with a better overview of the product. As a result, people now spend around a tenth of the time searching for a new car compared to the amount of time they used to spend before the rise of the internet. Unfortunately, the payment process has proven to be a challenge for us. Listings usually have multiple interested parties, and people tend to make deposits to gain an advantage over competing buyers. This system was prone to fraud, so we developed our MercadoPago system, which helps people with their reservations and vehicle viewings while protecting buyers from malpractice in this area. Furthermore, we believe that it is the customer’s responsibility to investigate the seller and the responsibility of the government to eradicate illegal products. We are the only company that checks every listing with an intelligenct system that detects typical fraud patterns. This department is constantly checking for repeated emails, phone numbers, and bank accounts, or other elements that raise red flags for us, such as people claiming to be major companies that sell car fleets, but who have not contacted us directly.

Q: What was the motivation behind MercadoLibre acquiring Autoplaza?

A: While MercadoLibre was the number one overall player within the Mexican market, Autoplaza was the number one player specifically in Mexico City, and was a great brand commanding considerable market recognition; quite simply, it made sense to acquire it to expand our reach and to offer more coverage to sellers. When a seller lists their product on either platform, it is advertised on both MercadoLibre and Autoplaza. 

Q: With large dealership groups in Mexico beginning to use online platforms, does this represent direct competition for your company?

A: We have been doing business in the Latin American market for 15 years. As a result, we are Latin America’s number one site in terms of e-commerce traffic, and we are the world’s eighth largest e-commerce site, period. Selling online is not an easy task; you have to build a strong brand in order to generate quality traffic, and then convert that traffic into opportunities. We are experts at doing this, so we are not threatened by new entrants. Several powerful retail companies have opened their websites in the hopes of attracting a portion of the online market. However, as many lack the expertise to adapt their sales strategies to fit an online scenario, no one has yet achieved the same success as MercadoLibre or AutoPlaza. Ultimately, if our competitors are successful and are able to provide pleasant online experiences to buyers and sellers, that customer base will become more invested in buying online, and building this trust benefits all companies involved in e-commerce.

Q: What innovations can we expect to see implemented on your websites, and do they translate into your strategic objectives?

A: One of our vital innovations is the MercadoPago system. We have also recognized the mobile market as an opportunity if we can connect efficiently. All in all, we strive to make our clients’ vehicle search much easier. On this note, we developed an Application Programming Interface (API), which allows both dealers and manufacturers to automatically integrate their systems with ours. To illustrate this, Ford receives used cars on a daily basis across its 300 dealerships. With our integrated systems, we can link their inventory with our site so that customers can monitor these opportunities immediately. So far, we have been receiving positive feedback on this new feature. In addition, although MercadoLibre does not sell any of its data, we were able to develop a price guidebook by gathering all of the product information listed on our website. By analyzing price, age of the car, mileage, and other factors, users are able to see roughly what price they should be paying for their new cars.