Mercadolibre will debut in the lending and logistics industry in Brazil

Author: Alberto Alerigi Jr.

SAO PAULO (Reuters) – Argentine online marketplace Mercadolibre Inc is delving into areas such as credit management and logistics that once belonged solely to large financial and retail groups to gain market share in Brazil, a top executive said.

The company’s operations in Brazil account for about half of its business, Chief Operating Officer Stelleo Tolda said last week in an interview. It expects Mercadolibre’s revenue to surpass that of B2W Cia de Varejo SA, Brazil’s largest e-commerce company, this year.

Tolda said the strategy aims to prevent money from leaving and going to Mercadolibre sites. Through mercadolivre.com in Brazil, the company competes with B2W – the owner of the Submarino, Americanas.com and Shoptime markets.

After ten years of listing on Nasdaq, Mercadolibre has become a benchmark in Latin America for e-commerce, providing the technological infrastructure for retailers small and large to sell everything from confectionery to real estate online.

“We know we are just at the beginning. E-commerce in Brazil currently accounts for only 4 percent of retail sales, Tolda said.

Brazilian e-commerce is expected to bring in about 50 billion reais ($15.36 billion) this year, up 12 percent from 2016, despite the deep economic crisis, according to research firm Ebit.

This figure does not include Mercadolibre, which last year reported revenue of $844.4 million in the 18 countries where it operates in Latin America and Portugal, up almost 30 percent year-over-year.

“There is still a lot of room for growth in Brazil,” Tolda said. “Brazil is more like a cake that keeps growing than a market where you have to steal pieces from others to grow.”

Mercadolibre is initiating tests to offer pickup services to large customers who use the site to sell their products, he said, adding that he will be responsible for negotiating prices with carriers.

It is also considering offering financing to companies using the website. Mercadolibre shares are up 66.6 percent year to date.

Ignacio Caride, CEO of Mercadolibre in Mexico, said the company plans to provide working capital loans to small businesses and entrepreneurs in Brazil and Mexico later this year. ($1 = 3.2549 real)

(This version of the story corrects paragraph 7 to show that Mercadolibre’s revenues grew 30 percent to $844.4 million in 2016, not 42 percent to $256.3 million)

(Writing by Alexandra Alper; editing by Matthew Lewis)