It is an electronic commerce giant whose services were of great importance during the quarantine. His story
The spread of the pandemic worldwide produced a pivotal moment for companies around the world. However, it was not for all the same: while many were paralyzed by the quarantines, others showed surprising abilities to overcome obstacles. One of the latter cases was that of Free market, which growth in recent months.
So much so, that the largest e-commerce site in the region is the only Latin American company included in a list of the 100 companies that have prospered during the pandemic, compiled by the British newspaper Financial Times (FT).
In the list, which heads the world’s largest online shopping site, Amazon, followed by Microsoft and Apple, Mercado Libre is ranked 37.
The FT highlights that during the month of April, the company based in Buenos Aires, Argentina, increased its sales by 76%.
“For Mercado Libre, being in the right place at the right time has been critical,” wrote the FT.
According to the British publication, one of the keys to the success of the Argentine company, today about worth $ 50 billion, was that “facilitated electronic payments during quarantine”
Thus, it managed to increase its popularity, which “had been on the rise for the past five years,” says BBC Mundo.
Marcos Galperín founded the company in 1999.
“Latin America has a relatively low penetration of electronic commerce, but Mercado Libre is already the clear leader in this sector,” the publication said.
The e-commerce portal was created in 1999 by the Argentine Marcos Galperín and his then partner, Hernán Kazah (who left the company in 2011).
Argentines came up with the idea while pursuing a master’s degree in Business Administration at the Stanford University School of Business in the United States.
The institution was immersed in technological culture due to its proximity to Silicon Valley, the main technological mecca in the world.
At that time, Amazon was still known for selling books, and the most famous e-commerce company was EBay, which did not operate in Latin America.
Taking advantage of that gap, Galperín and Kazah launched a small startup from an office in a parking lot, which allowed businesses and individuals to sell items online, paying a commission.
According to Galperín, today president of the regional company, the main challenge they faced was overcoming the mistrust generated at that time by internet businesses and the exchange of products for money between strangers outside a physical store.
Its success was such that two years after its founding, eBay decided to buy 20% of the company’s shares, instead of competing against it, and today it is still the main shareholder of Mercado Libre.
A regional giant
Nowadays, Mercado Libre has become a virtual purchase and payment platform that operates in 18 Latin American countries, where until the end of last year, electronic commerce represented about 4% of the total expenses made by the inhabitants of this region, according to the specialized media eMarketer, which also ensures that the growth rate of Mercado Libre accelerated starting in April.
In fact, despite the fact that its headquarters are in the City of Buenos Aires, more than 60% of its business is generated from its operations in Brazil, the largest economy in Latin America.
The same happens with Mercado Pago, the company’s credit arm, which has also grown during the pandemic, with an increase of 155.6% in April and with unique active users reaching 43.2 million.
Mercado Pago has also capitalized mobile payments by launching the mPOS and a mobile wallet that allows paying public services and making QR code copays..
In general, during the first quarter of this year, Mercado Libre had reported a growth of 70.5% year-on-year in its turnover, to reach a total of US $ 652.1 million in that period.
Also between last January and March it managed to add another 13 million users to currently exceed the 43.2 million registered in the entire region.
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