Latam e-commerce giant MercadoLibre revenue soars on pandemic-led boom

MercadoLibre posted a 67 per cent jump in quarterly revenue on Thursday as the South American e-commerce giant benefited from a surge in online shopping during the COVID-19 crisis.

The Argentine company has capitalised on the pandemic-induced boom in e-commerce and online payment across Latin America by ramping up investments in its logistics business.

It has also expanded its fintech services and increased its warehouse network in Mexico to stave off competition from companies including Amazon.com Inc and homegrown brand Magazine Luiza.

MercadoLibre's gross merchandise volume, a widely watched figure for the e-commerce industry's performance, rose 23.9 per cent to US$7.31 billion in the third quarter.

The company, present in 18 countries including Brazil, Mexico and Colombia, posted a more than 3 per cent rise in active users to 78.7 million.

"We are entering into a process of maturing our base in which the main objective is to make clients more loyal, incentivising them to make more transactions that yield revenues," said Andre Chaves, MercadoLibre's vice president of strategy, corporate development and investor relations.

He said the company should have some comparative advantages due to its effort to boost the logistics operation, giving it a better ability to control costs in the inflationary environment.

MercadoLibre's revenue rose 74 per cent in Brazil and 94 per cent in Mexico, while the Argentina business grew 38 per cent.

Overall, net revenue was US$1.86 billion for the quarter to Sep 30, in line with analysts' estimates, according to Refinitiv.

Net income rose to US$95.23 million, or US$1.92 per share, from US$15.04 million, or 28 cents per share, a year earlier.