

#Ecommerce


Overall #Ecommerce sales will reach $ 116B by 2023

Here is a company that has many DETRACTORS


Here is an EASY thread

$MELI Mercado Libre was founded in 1999 by Marcos Galperin (current CEO) 
It operates an online marketplace and auctions in 18 countries in LATAM
$MELI also offers shipping solutions
for marketplace users, digital payments
and advertising solutions

It operates an online marketplace and auctions in 18 countries in LATAM

$MELI also offers shipping solutions



Looking good? Well there is much more 
Mercado Libre - Marketplace
Mercado Shops - Online storefronts / website builder for sellers
Mercado Libre Publicidad - Advertising
Mercado Classificados - Real Estate and automotive









Sellers pay commissions on their sales

The 52m users (45% growth YoY) can buy whatever they want







Items sold reached 179m - growing 101% YoY
All of this is supplied by the more than 11m sellers 
GMV reached $ 5B during Q2 ’20
An increase of 102% on FX neutral basis (49% in USD terms)


GMV reached $ 5B during Q2 ’20

Sounds like huge numbers
Well, there are two sides of the same coin 
Users (45% users growth) are buying more items that are more expensive resulting in 102% GMV growth - In LOCAL CURRENCY
When translated to USD dollars the YoY GMV growth shrinks to 49%












More on the FX and political risk at the end of this thread

How does $MELI compares to competition
Let’s look at key regions 
Numbers are in million visits / month
$MELI 260 > Americanas 116 > OLX 106
$MELI 30 > Fravega 7.8 > OLX 3
$MELI 117 > $AMZN 52 > Coppel 25
$MELI 44 > Falabella 9.6 > OLX 6.8







$MELI leads ALL OF LATAM
Let’s have a look at the TAM 
#Ecommerce in LATAM is set to reach $116B by 2023
Coming from $ 70b in 2019
The COVID pandemic brought 11m new users online
Totalling 192m digital buyers (around 34% of full potential)


#Ecommerce in LATAM is set to reach $116B by 2023

The COVID pandemic brought 11m new users online

Small share of online buyers
and low internet penetration
represent a huge opportunity
In LATAM #Ecommerce retail sales as percentage of total sales stands at 4.7% in 2020
For comparison, this number stands at 16.1% the USA and Europe (coming from 12% pre-COVID)








Leaving plenty of room for growth

So here we have “THE” #Ecommerce leader of LATAM 
The only problem identified so far is the currency risk 
In the background of course, we can hear some chatter about the weak infrastructure
and payment systems
in LATAM






When confronted to a roadblock
leaders innovate
and laggards complain 
Through acquisitions, partnerships and in-house initiatives $MELI has created its own
Logistic Solution (shipped 127m items in Q2 ’20 - A 124% YoY INCREASE)



Through acquisitions, partnerships and in-house initiatives $MELI has created its own





We will NOT focus on these business areas here 
Next WEDNESDAY, we cover Mercado Envios
Mercado Credito
Mercado Shops
Mercado Pago






A look at $MELI financials
Sales of $ 878m in Q2 ’20 - growing 61% YoY with GMs of 49% (stable)
Op. Inc. of $ 89m - Coming from $ 7.3m in prev. Year
Cur. Assets of $ 4.8B vs. Cur. Liab. of $ 2.7B & LT debt of $779m
Ops. CF of $ 650m vs. $ 28m in prev. Year













On the
Currency risk, this is a hard nut to crack 
It is happened before that the Argentine Peso fell 15% on a surprise political result
https://edition.cnn.com/2019/08/12/investing/argentina-peso/index.html
No one can tell it won’t happen again
Always better to know the risks than to ignore them



https://edition.cnn.com/2019/08/12/investing/argentina-peso/index.html
No one can tell it won’t happen again

On the
Geopolitical situation, we can try to predict what this means for #Ecommerce
Whatever happens #Ecommerce is benefiting from secular tailwinds in LATAM that are hard to stop


Just look at what happened with COVID
#Ecommerce exploded, a quick look at these graphs shows how $MELI went VERTICAL
https://www.marketplacepulse.com/stats/mercadolibre


GDP is set to grow at modest pace for most LATAM countries
Proj. GDP Growth 2021 in LATAM
2.5% in base case scenario / 1.5% in down scenario
1.5% in base case scenario / 1% in down scenario
1.5% in base case scenario / 1% in down scenario

















NEXT Wednesday for a deep dive into Mercado Pago
Mercado Envios
& more!
Please note that this is not a recommendation to buy - You are responsible for conducting your own research




Do not miss anything
Stay in the loop 
For more content, follow us on Twitter
Want to get UNDER HYPED companies delivered straight to your inbox? Subscribe now! https://getbenchmark.substack.com




Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ SimilarWeb
Sources
✑ Investor presentation
✑ Company website
✑ SimilarWeb
✑ eMarketer
✑ MarketPlacePulse
✑ SPGlobal
✑ Labsnews
✑ MarketPlacePulse
✑ SPGlobal
✑ Labsnews