It seems like a Latin American online shopping company has unlocked the secret to becoming an online retail giant.
MercadoLibre (MELI) is a Uruguay-based commerce and financial services company that has been serving Latin American customers for over 25 years.
Like Amazon, the company platforms small and medium-sized businesses and provides them with the tools they need to compete against their bigger competitors.
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The online retailer has a proven successful track record when it comes to its finances.
According to MercadoLibre's Q2 earnings report, the company had a gross market value of $12.6 billion and net revenue of $5.1 billion, which grew 42% compared to the same time the year prior.
The company's income from operations was $726 million, and its net income was $531 million, which is a 103% growth compared to the last fiscal year.
MercadoLibre's stock is 64% higher than it was at the same time last year and was up by 0.40% as of Thursday's Market Open numbers.
Unwavering loyalty in its top markets
The online retailer has over 218 million customers across 18 Latin American countries.
MercadoLibre's unique buyers were up 19%, and the number of items sold increased by 29% year over year, the highest number the company has seen since 2021.
For the company's regional clients, Brazil generated the highest revenue with a 51.2% increase, followed by Mexico with a nearly 66% increase and Argentina with an almost 1% increase compared to the previous fiscal year.
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Stepping into the U.S. market
As stated in the Q2 earnings call, MercadoLibre's next step is integrating U.S. sellers. This year, the company launched a fulfillment center in Texas, the first outside of Latin America, to expand the assortment of products offered to Mexican consumers.
However, borders do not seem to be a challenging hurdle for MercadoLibre; the company offers its Mexican clients free shipping, with packages delivered in just a few days.
Among U.S. online retailers, Amazon's stock increased by 32%, and eBay's increased by 36.5% compared to the same time last year, making MercadoLibre's stock increase the highest among the three.
"We think this could be multi-country in the future, but it's too early to tell. But signs of that operation are really, really positive. We see consumers getting extremely engaged with the products that we are offering, and we see our sellers from the U.S.," said MercadoLibre's Commerce President Ariel Szarfsztejn during the Q2 earnings call regarding the company's expansion to the U.S.
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Efficiency in numbers by robotics
MercadoLibre found a way to adapt to its clients' high demand through the use of technology. In June of this year, the company integrated robotics into its Brazil distribution centers to collaborate with its human workforce.
Currently, 100 robots have been integrated, but it plans to integrate more than 300 by the end of the year. This tech integration has successfully optimized production by 20% by reducing repetitive tasks.
"This is, therefore, a great moment to reaffirm our belief that the best is yet to come," said MercadoLibre's CEO Marcos Galperín during the Q2 earnings call.
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