Mercado Libre Reports 1Q22 Financial Results
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Mercado Libre Reports 1Q22 Financial Results

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Antonio Gozain By Antonio Gozain | Senior Journalist and Industry Analyst - Fri, 05/06/2022 - 10:16

Latin America’s leading e-commerce technology company Mercado Libre reported a US$65 million net income in 1Q22, following a loss in 1Q21. The company reported a profit of US$1.30 on a per-share basis.

“We kicked off 2022 with a strong first quarter across all businesses, following a record year in 2021. Mercado Libre is coming out of the pandemic period stronger than we were two years ago with a more mature business at scale, a larger team with complementary capabilities and much better services and experiences for our users in all of our key geographies,” the company said in a statement.

Mercado Libre provides users with a portfolio of services to enable online commercial transactions in Latin America. Brazil, Argentina and Mexico are the company’s main markets. Mercado Libre offers an ecosystem of six integrated e-commerce services: marketplace, classifieds service, the MercadoPago payments solution, an advertising program, the MercadoShops online Webstores solution and the MercadoEnvíos shipping service.

In the commerce business, Mercado Libre drove sustained growth during 1Q22. Gross Merchandise Volume (GMV) was almost US$7.7 billion, growing approximately 27 percent on a USD basis, reported the company. Argentina and Brazil led all markets in GMV growth during the period and “benefitted year-over-year from improvements in engagement and buyer frequency.” Mercado Libre reached almost 40 million buyers and sold around 267 million items in 1Q22.

The advertising service “has been a core area of focus for us to create better offerings for sellers that want to optimize their buyer conversion rates,” said Mercado Libre. 1Q22 was a period of investment in the advertising area, which has great potential, the company added.

MercadoEnvíos is a transformational service for Mercado Libre, according to the company. While the network already handles over 90 percent of sales volume in Latin America, “there is still room to keep investing in the next phase of deployment of these services.”

Mercado Libre continues improving its logistics, mainly focused on last-mile deliveries. During 1Q22, almost 55 percent of shipments were delivered within the same or next day of purchase, achieving record average shipping times in Mexico and Chile, said the company.

Earlier this year, Mercado Libre announced a US$1.48 billion investment in Mexico to strengthen its logistics network, as reported by MBN. Between 2017 and 2021, Mercado Libre invested US$2.2 billion in Mexico: US$100 million in 2017, US$275 million in 2018, US$300 million in 2019, US$420 million in 2020 and US$1.1 billion in 2021. This year’s bet represents 67 percent of the total investment made during the past five years.

Mercado Libre Increases its Electric Vans in Mexico by 1,000 Percent

As part of its investment in Mexico, Mercado Libre added 150 electric vans, following the 15 e-vans the company bought from Renault México in Dec. 2020. With the recent acquisition, the e-commerce company increased its electrified fleet by 1,000 percent.

Renault’s Kangoo electric version is increasingly being adopted by delivery and logistics companies, said Magda López, CEO, Renault México, to MBN: “Renault has been selected as one of the best options by leaders in the delivery market, such as DHL and Mercado Libre, among others. For these businesses, acquiring EVs starts as a branding tool but once they see the economic and other benefits offered by these vehicles, they consider them a real business solution.”

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