By Debbie Teschke
Mercado Libre, the largest e-commerce retailer in Latin America, offers housewares suppliers access to a market of more than 636 million people in a region with one of the world’s fastest-growing Internet penetration rates. Mariano Migues, cross border trade manager at Mercado Libre, opened Connect GLOBAL, this year’s virtual edition of the International Business Council’s Global Forum, with a keynote presentation on the retailer and how IHA members can expand their sales in the market through working with Mercado Libre.
The publicly traded company calls itself an ecosystem and provides a range of services to product suppliers and consumers. Services include a marketplace, payment installments, e-building solutions and shipping. It is a mix of e-commerce and fintech covering 18 countries, eight operations and more than 15,000 employees, Migues said. Mercado Libre is the eighth largest e-commerce site in the world, behind Walmart and ahead of Apple and Google Shopping.
“We are proud to be surrounded by such huge and amazing companies,” Migues said. “Our hard work and entrepreneur philosophy allowed us to grow our business exponentially in a region that can be a little complicated.”
The Mercado Libre platform was launched in 1999 in Argentina, later expanding to Brazil, Mexico and Uruguay. During the next 10 years, the company grew regionally to Ecuador, Chile and Venezuela; Peru; Dominican Republic, Panama and Costa Rica; and in 2015 to Bolivia, Paraguay and Guatemala. In 2007, Mercado Libre issued an IPO, which “steered us into the ‘big leagues’,” Migues said. Other highlights include the launch of Mercado shops in 2010, Mercado Credito in 2017 and the 2020 opening of an IT center in Bogota, which provided the technology allowing the retailer to connect and expand its reach.
Mercado Libre is top of mind in e-commerce and top in user traffic in every market, Migues said. It has 65 million customers; 12 million sellers; more than 300 million products published, 94% are new products; sells 27 items per second and has more than 533 visits per second. The company prides itself on delivering the best purchase experience to customers, he added, focusing its efforts on having an excellent shipping solution so that in most cases it can offer same-day delivery or 44-hour delivery at the latest in most of the countries in which it operates. Year-over-year growth for both number of items sold and gross merchandise volume has been more than 100% as of Q1 2021, Migues said.
Mercado Libre’s Global Selling program allows suppliers to sell throughout Latin America, reaching millions of customers. Suppliers have one account and can sell in each country without having to register as a local seller. Mercado Libre manages each account, selling the product in the local country’s currency but paying the supplier in U.S. dollars, Migues explained. Listing products on its website is free and suppliers are charged a percentage of a product’s value every time an order is placed. This sales fee includes free payment installments for the buyer. Migues said that if a retailer cannot offer payment installments to customers, it will not be successful selling in the market.
Mercado Libre also offers shipping options. Suppliers can decide whether they want to ship directly to consumers from the U.S. or have Mercado Libre fulfill orders through its Mercado Envios network. Shipping can be the most complicated part of international business, Migues said, and depending on the country, a supplier can ship any or all of its catalog directly to the warehouse for Mercado Libre to fulfill the order.
With DTC, Mercado Libre provides the shipping labels and tracking information and has its logistics partners pick up from the supplier’s warehouse for delivery to customers. With Mercado Envios, the company will store, package, distribute and track the product. Lead times are shorter with this option, and same-day delivery is offered in some cities, he said.
Migues also explained how easy it is to upload a catalog to the company’s website. Suppliers simply upload product listings in English and the platform translates to the appropriate language as well as automatically translates to English for pre- and post-sale questions and claims.
Another benefit of the Mercado Libre platform is product ads offering more product visibility to customers searching for specific items. Mercado Libre will create the ads with the product listings and choose when to show them to deliver the best results for the supplier. Suppliers can choose which ads not to show and pause or activate their campaigns at any time. Suppliers pay only when user click on ads, and they can set a daily budget for ad use and change it at any time.
IHA members interested in the markets covered by Mercado Libre are encouraged to follow up with Mariano Migues at mariano.migues@mercadolibre.com
