With a net loss of US$46.1 million, Meikeduo’s fourth quarter financial report is released!

The COVID-19 pandemic has driven the growth of e-commerce, during which many e-commerce giants have made efforts to compete for more traffic and users. As the largest e-commerce platform in Latin America, what kind of data did Mercado Libre create in 2021?

Meikeduo's net profit loss in the fourth quarter of 2021

Financial report data shows that Mercado Libre's net revenue in the fourth quarter of 2021 reached US$2.1 billion, a year-on-year increase of 60.5% and a 73.9% increase on a foreign exchange neutral basis; gross profit was US$853.2 million, with a profit margin of 40.0%, an increase of 3.2% compared to the fourth quarter of 2020.

It is worth mentioning that although many data showed an upward trend, the net loss data in the fourth quarter showed a net loss of US$46.1 million, which was lower than the average forecast of net income of US$54.04 million by Refinitiv and did not meet expectations, but the situation has improved significantly compared with the loss of US$50.58 million in the same period last year.

Currently, Mercado Libre operates in 18 countries including Mexico, Brazil and Colombia , attracting consumers from many countries. In the fourth quarter, the number of active users increased by more than 11.1% to 82.2 million . Among them, net income in Brazil increased by 56% and in Latin America by 60.5%.

According to financial report data, during the fourth quarter of last year, GMV increased to US$8 billion, a year-on-year increase of 21.1%, and sales of goods exceeded 287.9 ​​million pieces, a year-on-year increase of 25.5%.

Pedro Arnt, Chief Financial Officer of Mercado Libre, said that last year was a year of both challenges and opportunities. Thanks to the team's adaptability and focus on goals, the company has been able to cope with the ever-changing epidemic situation, rising costs and fierce industry competition, and achieved record highs this year. Key business indicators and revenue continued to grow, and profit margins and operating income increased for two consecutive years .

Mercado Libre mentioned in its third-quarter financial report that the platform's GMV for the quarter was US$7.3 billion, a year-on-year increase of 23.9%; the platform sold a total of 259.8 million items, a year-on-year increase of 26.3%; calculated in US dollar terms, the platform's revenue in the third quarter increased by 74% year-on-year in Brazil and by 94% year-on-year in Mexico.

By comparing the data from the third and fourth quarters of last year, it can be seen that what Chief Financial Officer Pedro Arnt said is true. Even under the influence of multiple factors such as the epidemic and costs, Meikeduo is still moving forward and developing steadily.

The number of new users in multiple countries and sites is still growing. Andre Chavez, senior vice president of Mercado Libre, said that the data growth is very strong. This year, the company may make new investments in Mexico, Brazil and Chile, and open four new logistics centers in Sao Paulo, Brazil. Earlier, it was reported that Mercado Libre will invest US$1.475 billion in Mexico in 2022 , focusing on logistics and technological innovation and opening more distribution centers.

Sitting firmly on the throne of Latin American e-commerce? Meikeduo is under "siege"

As the e-commerce giant with the largest local traffic, Meikeduo, known as the "South American version of eBay", has long attracted many cross-border e-commerce sellers. It has an absolute reputation and status in Latin America, with an average daily sales of more than 1 million products and 6,000 searches per second.

Meikeduo sells a wide range of products, including not only electronic products, home appliances, toys and furniture that consumers often use, but also personal assets. Currently, Meikeduo's business scope has covered 18 countries including Brazil, Argentina, Mexico and Chile.

Compared with the rapidly developing e-commerce markets in Asia, Europe and other regions, the e-commerce market in Latin America is still in its early stages of development. It is the fastest growing e-commerce market in the world and is favored by many sellers, which has attracted many sellers to go there.

As the fastest growing e-commerce city in Latin America, Mexico has undoubtedly attracted much attention. Relevant data show that as early as 2020, the market value of e-commerce in Mexico has reached 316 billion pesos (about 100.5 billion yuan), accounting for 9% of the country's total retail sales. Based on the rapid development of Mexico's online shopping market, industry insiders predict that in 2023, Mexico's e-commerce sales will double to 15% of the country's total retail sales.

Under such circumstances , many sellers have focused their attention on the Mexican market, and e-commerce platforms such as Meikeduo, Amazon and Walmart have become the first choice for many sellers. Due to the simple entry conditions of Amazon, many Chinese sellers choose to enter the Amazon Mexico site as their first stop to enter the Mexican e-commerce market. The development of platforms such as Amazon and Walmart in Mexico is eroding Meikeduo's market.

In order to seize more share of the online market in Mexico, Meikeduo began to invest US$420 million in the Mexican market as early as 2020, and plans to open more stores in the future to improve its infrastructure and technology to operate its own warehouses.

As for entering the Mexican market, many industry insiders have a dispute over whether to choose Amazon or Meikeduo. Some industry insiders believe that Amazon has a higher brand awareness and is trustworthy; others believe that Meikeduo has a greater preferential policy, which will not only attract sellers to settle in, but also attract more consumers to buy.

In addition, many industry insiders also said that Meikeduo's development position in Latin America is relatively stable. First, Meikeduo is positioned by many industry insiders as the "eBay of Latin America", focusing on low-consumption groups, with a wide coverage and a large user base, which is relatively stable; second, Meikeduo has its own mobile payment platform, and the combined traffic is huge; third, Meikeduo covers a wide range of categories, which is suitable for the sales of different categories of products by different sellers.

An earlier survey data showed that Meikeduo is the most frequently used e-commerce platform by Mexican consumers, surpassing Amazon, which ranks second, and Walmart, which ranks third, and is highly favored by local consumers.

But for Meikeduo, the strength of Amazon and Walmart, which follow closely behind it, should not be underestimated. Of course, sellers can also choose to operate multiple platforms at the same time based on their own capabilities. While building their own international brands through Amazon, they can also use e-commerce platforms such as Meikeduo to diversify risks.

With the continuous advancement of infrastructure construction in Latin America, the e-commerce environment is also constantly improving, and the e-commerce economy in Latin America may usher in a blowout development. But for sellers, no matter which region or platform they choose to cultivate, they must strictly abide by the platform rules and not cross the red line, so as not to lose more than they gain.

Meikeduo

Latin America

E-commerce