Once again, results from Argentinian e-commerce giant Mercado Libre came above market expectations and at a bad time for retailers. The company ended 2022 with a total net revenue of USD 10.5 billion, up 49 percent in relation to 2021 and an all-time yearly record.
As the company’s largest market, Brazil accounted for USD 5.6 billion of Mercado Libre’s net revenues last year, with a 44.6 percent growth over 2021.
“Our ability to offer a very broad product assortment from sellers of all sizes at competitive prices and with rapid delivery continues to be a key differentiator for Mercado Libre,” said CFO Pedro Arnt, in a conference call with analysts. The company surpassed the mark of 1.1 billion items sold in 2022.
E-commerce operations, including Mercado Libre’s marketplace and its ads strategy, accounted for USD 5.8 billion of net revenues, up 25.3 percent from 2021. On the other hand, fintech operations from Mercado Pago made up USD 4.7 billion of the company’s total net revenues last year, an impressive growth of 94.2 percent over the last year 2021.
Mercado Pago is now a digital bank, offering digital accounts, credit cards, insurance, and investment services. It has over 43.7 million active users in Latin America, especially in Brazil, Argentina, and Mexico.
The company posted a net profit of USD 481.9 million last year, more than five times its total in 2021.
In addition to the outstanding performance of the company’s fintech arm, what explains the success of Mercado Libre is the fact that the company is a marketplace that connects sellers and consumers, not being directly responsible for purchasing goods or inventory.
It also has no brick-and-mortar stores to maintain, although it has built a colossal logistics and fulfillment network.