MercadoLibre Inc., the e-commerce powerhouse in Latin America, posted record volume in merchandize in the third quarter of $ 7.3 billion and is now looking to expand to fresh foods as per Bloomberg news.
The Buenos Aires-based company, after starting to offer fresh food in Brazil a month ago in a partnership with Mambo, a local retailer, is now looking to replicate this partnership model in Mexico and Argentina, according to Senior Vice President Andre Chaves.
Chaves said ‘It is early days, and we are focused on the operation side to ensure everything is working smoothly and ready for escalation. This is the first step to gaining experience”.
Chaves declined to give a timeline for starting in Mexico and Argentina but said it is not far away. He also noted that signing more vendors in Brazil is also a possibility.
The most valuable Latin American company posted net revenue of $ 1.9 billion in QTR 3 on Thursday and aligned with analysts’ expectations. Even though the company posted record merchandise sales, it fell short of estimates. It reported $1.92 as per-share earnings. The company boomed since pandemic as Latin Americans increased their online buying and digital payments.
The number of users growth was modest, but the frequency per user increased dramatically as per Chaves.
Analysts closely followed the MercadoLibre KPI for its fintech business. The company’s credit portfolio increased to over $1.1. billion in QTR 3, up from $ 810 million in the previous quarter.
Concern over Pax Global
The recent FBI raid on Pax Global technology, a Chinese hardware supplier that offers POS (point of sale) terminals, will not impact them as MercadoLibre depends on five POS hardware suppliers and uses its in-house software. The rival fintech companies in Brazil, Stone Co Ltd and PagSeguro Digital Ltd, saw their share plummet as Pax was their supplier.
According to Chaves, security and privacy are top concerns. They will be tracking the developments on the Pax front and are confident that MercadoLibre won’t be impacted.
He also said that the company is not facing any major supply chain disruptions. It has many sellers and has lower exposure in selling consumer electronics products that are affected the most by disruptions.
Change in Leadership
Pedro Arnt, the Chief Financial Officer of MercadoLibre, in a call with analysts, informed that one of the founders, Stelleo Tolda, is leaving the company after two decades of a full-time role.
From April 1, 2022, Stelleo Tolda will become strategic advisor, while Ariel Szarfsztejn, the senior vice president, will replace him as Commerce President.
