Latin American eCommerce platform MercadoLibre highlighted record growth in the second quarter of 2023, driven primarily by sales growth and cost efficiencies.
Net revenue grew 57.2% year on year to reach $3.4 billion, according to earnings results released Wednesday (Aug. 2). This led to income from operations more than doubling to reach a new quarterly record of $558 million.
Quarterly marketplace sales volume surpassed the 10 billion mark for the first time, driven mainly by Brazil and Mexico, which overtook Argentina to become the firm’s second-largest commerce geography for the first time.
“Rapid top-line growth and strong margin expansion were broad-based across geographies and business units, showing the strengths of our business and the potential of our financial model as we continue to gain,” Mercado Libre Chief Financial Officer Pedro Arnt said in a video recording released as part of the report.
Looking to strengthen its position in Mexico, a highly underbanked and cash-heavy economy, MercadoLibre expanded its consumer credit offerings in Q2 with the launch of a credit card in the country. The move is expected to drive engagement, principality and digitalization of cash in the Mexican market, per Arnt, becoming a key component of Mercado’s long-term strategy to drive digital payments adoption among consumers and merchants in the country.
MercadoLibre has also expanded its insurance solutions, targeting a product with low penetration in Mexico, with extended warranties for items purchased on its platform, including insurance for life, cellphones and personal accidents. The extended warranty products have also been expanded to include cross-border purchases for the first time.
Additionally, the eCommerce giant is planning to expand its cross-border operations in Brazil to compete against American and Asian players, telling analysts and investors that it will be capitalizing on its strengths, including traffic, brand trust, payments infrastructure and local logistics to build and scale a robust cross-border business in the country.
As of Q2 2023, MercadoLibre’s annual active base has surpassed 108 million, with 8 million new active users joining the platform in the quarter, the company said.
In April, the firm announced plans to add 13,000 jobs this year, focusing on logistics operations in Brazil and Mexico, as well as the Argentinian company’s tech and product teams.
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