Mercado Libre Delivers Good Results in 3Q20By Andrea Villar | Thu, 11/05/2020 - 10:00
There is no doubt that e-commerce has been one of the big winners of the pandemic and Mercado Libre came to corroborate it. The Argentinian company reported net profits during 3Q20 of US$1.1 billion, representing growth of 148 percent year-on-year. According to the company, profits were driven by 110 percent year-on-year growth in the number of items sold, which reached 205.7 million during this period. The number of items shipped grew for the third consecutive quarter and Mexico was the only country to show deceleration in this area compared to 2Q20.
The company, led by David Geisen in Mexico, said that during 3Q20 it reached 304 million articles listed, a record for the company. In addition, it reported that online sales have grown despite the reopening of brick-and-mortar stores and added that its buyers have diversified the type of products they purchase on the platform. Likewise, Mercado Libre reached 60 million unique buyers in that period.
According to the report, toward the end of the quarter, Mercado Libre’s consolidated sales were shaping up to reach growth levels similar to before the start of the pandemic. The profitability of the online trading and payments divisions has led to net profit growth in Mexico of 138 percent and 140 percent in the last two quarters.
MercadoLibre also saw year-on-year growth of 105 percent in its earnings from financing, business loans and off-platform transactions. The company also noted that an increase in its commitment to logistics and shipping led to a 4 percent decrease in its gross profits. Earlier this week, Mercado Libre announced improvements to its last-mile delivery system, Mercado Envíos, to ensure that users receive deliveries within 24 hours. These include, according to Geisen, the rental of four cargo planes for use in Mexico and four more in Brazil, as well as several last-mile storage centers in different states and a truck fleet. "The last mile becomes very important because of the rising demand and more companies wanting to send packages through the logistics network. With an investment of MX$1 billion we can now ensure that deliveries are made within 24 hours," Geisen said at the virtual event.
Back in July, Mercado Libre said it will invest US$27 million in the construction of a distribution center in the state of Jalisco to accelerate deliveries in the country's central region. The warehouse will have 60,000m2 and half will be in operation by November, said in a press conference Javier Dolcet, Head of Operations of Mercado Libre in Mexico. In February, the Argentina-based company said it will invest US$420 million this year in Mexico, its fastest-growing market.