MELI's Dominance

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With all of the companies we hype up on a weekly basis, what would you wager is the most valuable firm in Latin America today?

Pemex? Nubank? Rappi?

Try Mercado Libre (MELI), the e-commerce giant out of Argentina which today has a market cap of over $120B. MELI’s share price has gone up by over 50% this last year and some 1500% over the last decade.

Since its launch in the late 1990s, MELI has taken over much of the e-commerce world of Latin America. In fact, judging by Google Trends, it’s the dominant e-commerce company across the region’s four largest economies: Argentina, Brazil, Colombia, and Mexico. In the first of these, the home country of founder Marcos Galperin, it’s near-hegemonic and well ahead of its competition.

Which isn’t to say MELI’s not up against some formidable players in this sector. Global e-commerce heavyweight Amazon has expanded beyond the US and European Union (followed by Walmart) to become a serious competitor in Brazil, Colombia, Mexico, as well as neighboring countries like Ecuador, Guatemala, and Peru.

In each of these countries, notable for their deep and intricate economic and political relationships with the US, Amazon has permeated Latin American conversations about the best online marketplaces to buy goods or products.

For example, Chilean multinational Falabella, which is South America’s largest department store chain, has managed to stay relevant in Colombia amidst MELI-Amazon competition.

And then, in Mercado Libre’s largest market, Brazilians appear to have largely grown less interested in low-cost Chinese firms like Shein and Temu (and Shopee to a lesser degree).

Hopefully, more local firms in the region will follow in the footsteps of Falabella and Mercado Libre and in the future we can see a plethora of homegrown heroes from which Latin American consumers will be able to choose.

Comment of the Week 🗣️

This week, Nicolas lays the blame for Pemex’s financial woes at the feet of Mexico’s former president in response to our chart on the state-owned oil firm—keeping in mind that the company’s issues long predate the 2010s.

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