Mercado Libre’s Revenue Up 94 Percent in 2Q2021By Andrea Villar | Fri, 08/06/2021 - 16:04
The e-commerce boom unleashed by the pandemic has become the bread and butter of businesses across the world. Mercado Libre’s second quarter report announced a 93.9 percent year-on-year growth in revenue and earnings of US$68.2 million, beating analysts' estimates.
Mercado Libre posted a 93.9 percent year-on-year increase in net income to US$1.70 billion, 15 percent higher than the US$1.48 billion expected by analysts surveyed by Refinitiv. Net income before taxes (EBT) was US$138.9 million, an increase of 55.5 percent over 2Q2020. The Argentinean company's e-commerce revenues grew 96.4 percent year-on-year to US$1,142 million, while revenues from its fintech business rose 88.9 percent to US$560 million.
“We believe our business is showing significant momentum despite high volatility in our key markets due to frequent physical retail closures in Latin America,” Mercado Libre’s CFO, Pedro Arnt, said in a statement.
The Latin American e-commerce giant currently operates in 18 countries in the region and has more than 11 million sellers and 40 million buyers. Between April and June alone, it had 75.9 billion active users in the region, a rise of 47.4 percent compared to the same period in 2020. According to its quarterly report, Brazil represents its main market with sales of US$951 million, representing 55.8 percent of the company's revenues, followed by Argentina with US$366 million representing 21.4 percent and Mexico with US$258 million accounting for 15.2 percent. The latter has played an important role in the company's strategy in recent years.
Back in April, Mercado Libre announced a US$1.1 billion investment for Mexico in 2021 to expand its storage and services space in the country. This figure exceeds the total invested by the Argentine e-commerce giant in the last four years in the country. It is nearly thrice the US$420 million that Mercado Libre invested in 2020. In 4Q2020, Mexico surpassed Argentina in terms of items sold through Mercado Libre. In revenue, however, the Mexican market still represents the company's second-fastest-growing market after Argentina.
To fuel its growth, Mercado Libre also announced a partnership with the leading Open SaaS e-commerce platform BigCommerce, which will let its customers sell in the Latin American countries where the Buenos Aires-based company operates. “As e-commerce continues to expand in Latin America, choosing BigCommerce as our first major platform partner is important for our long-term strategy and gives store owners access to this fast-growing market,” said Director of Cross Border Trade at Mercado Libre, Jose Luis Hervás Fernández, in a statement in late July.
In 2Q2021, Mercado Libre registered 319.1 billion publications and sold 244.6 billion items, 37 percent above the same period last year. Mercado Pago, the company’s fintech business, recorded a 67.2 percent growth in online payments.