Mercado: Latin America's Alibaba on a Long-Term Play for $100 Billion Market Cap

MercadoLibre (hereinafter referred to as Meli) may not be well-known to domestic readers and investors. In fact, similar to Alibaba in China and Sea in Southeast Asia, Meli can be considered the largest and most successful internet leader in the Latin American region. It simultaneously owns the largest e-commerce platform and financial payment businesses in Latin America, comparable to Taobao and Ant Group in the region.

Moreover, although the internet industry in Latin America is still in the early stages of development as an 'emerging market,' Meli is not a newcomer in the industry. In fact, it was established in Argentina as early as 1999, making it an internet 'veteran' of the same era as Alibaba, which was also founded in 1999, and Amazon, founded in 1994.

However, looking back at Meli's stock performance since its listing in 2007, the company's performance was relatively 'unremarkable' until 2019, with an annualized return rate of only 12%. From this perspective, Meli does not appear to be a 'good company' that can bring substantial returns to shareholders. However, after the pandemic hit, Meli seemed to suddenly enter a period of explosive growth in both stock price and performance.

Therefore, Dolphin Research's coverage of Meli will mainly focus on the following questions:

① What is the specific composition of Meli's business, why was its performance lackluster before 2019, and why did it experience explosive growth before and after the pandemic?

② As mentioned earlier, Meli simultaneously owns the most successful e-commerce and financial payment businesses in Latin America. What is the situation in these two industries in Latin America? What is Meli's market position and competitiveness in them?

This article will mainly focus on the e-commerce business, while the next one will focus on the financial payment business.

Detailed Analysis:

I. What kind of company is Mercado Libre?

1. Meli owns two major segments: e-commerce and financial payments

In simple terms, Meli's current business includes two major segments: platform e-commerce and financial payments. Specifically:

① The e-commerce segment includes four sub-businesses: e-commerce commissions, fulfillment logistics, in-platform payments, and advertising. The e-commerce platform is Meli's earliest business, launched in the Argentine market (the company's founding place and headquarters) as early as 2000, when the company's revenue almost entirely came from platform commissions. Subsequently, to address the inherent issues of fund security and mutual trust in online transactions, Meli launched the in-platform payment function Mercado Pago in 2003.

Later, to address the long delivery times and unstable services of third-party delivery in Latin America, Meli began building its own fulfillment service Mercado Envios in 2013, and currently, over 90% of the packages on the platform are fulfilled by Meli. Finally, the previously underdeveloped e-commerce advertising business also experienced rapid growth within Meli's e-commerce ecosystem after the pandemic.

② The financial payment segment includes off-platform online/offline payments, digital wallets, and consumer finance, among other sub-businesses.

As mentioned earlier, Meli's financial payment business started with its on-platform payment function. However, it quickly expanded to off-platform businesses, including payment acquiring services (POS machines or QR codes) on other third-party online platforms and offline stores.

By 1Q25, approximately 65% of Meli's total acquiring payment volume of about $40.3 billion came from off-platform. Meli's payment business has moved beyond merely supporting the e-commerce business, becoming a payment tool for users in all life scenarios.

Beyond payment services, Meli has also developed various credit businesses for consumers and merchants, including buy now, pay later (BNPL), credit card business, digital wallets, and merchant operating loans.

In 1Q25, the revenue from Meli's credit business reached about 78% of the payment business revenue, and in terms of scale, the credit business is roughly equivalent to the payment business.

Or simply put, similar to Alibaba, Meli has also cultivated an independent 'Ant Group' from its e-commerce business, and what is better than Alibaba is that Meli still consolidates and holds a controlling stake in this 'Ant Group.'

③ In summary, Meli has built a comprehensive, wide-ranging, and closed-loop business system in both the e-commerce and financial payment segments. It is not an exaggeration to say that in terms of the completeness of business layout alone, Meli has already demonstrated the 'strength' of the largest internet company in the region.

2. An old horse with great ambition, accumulating strength for a long time

However, although Meli is an 'old soldier' established before the new millennium and has built a comprehensive business system over many years of development, Meli's performance growth was not outstanding until 2019. Similar to the distinct performance of Meli's stock price before and after early 2019, Meli's performance growth can also be clearly divided into two stages.

In the first stage, during the fiscal years 2009-2018, Meli's total revenue growth rate hovered mostly between 20% and 40% in most years. For a company still in the early stages of development with a relatively small revenue base (total revenue for 2018 was only $1.44 billion), this was undoubtedly not outstanding.

In the second stage, Meli's performance and stock price began to 'rocket' in 2019-2020, driven by two obvious factors:

① The pandemic's huge driving force on the development of the online economy led to explosive growth in the Latin American e-commerce business, which had been developing 'lukewarmly' for over 20 years. (Key indicator: the company's GMV CAGR from 2016-19 was 20.3%, while the GMV CAGR from 2019-2022 reached 35%);

② Meli's financial payment business officially broke out of the e-commerce system into offline payments, digital wallets, consumer finance, and other businesses, becoming the second growth curve driving the company's growth. (Key indicator: in 2019, off-platform TPV exceeded on-platform payment volume for the first time)

Based on the above understanding of Meli, Dolphin Research will further explore and analyze Meli from the perspectives of the e-commerce and financial payment segments, attempting to explore the industry environment they are in, Meli's current industry position and competitive landscape, and what are Meli's differentiators and advantages and disadvantages. This article will explore its 'core pillar' e-commerce segment, while the next one will focus on the 'future star' financial payment business.

II. Is the Latin American e-commerce market a good market?

① Latin American e-commerce is still 'in its infancy,' with Brazil and Mexico accounting for about 80% of the market share

According to eMarketer's statistical forecast, the overall market size of the Latin American e-commerce industry is expected to be about $175 billion in 2024, with a scale slightly close to another major emerging e-commerce market, Southeast Asia. From the GMV perspective, any of the four major domestic e-commerce platforms, Taobao, Pinduoduo, Douyin, and JD.com, have annual volumes higher than it.

However, compared to mature markets, the gap in scale is quite large, equivalent to only about 1/7 of the US market and 1/12 of the Chinese market. For an American market with a total population of about 500 million (excluding the US and Canada), it is clear that the e-commerce market in Latin America is still in the early stages of development.

Structurally, from Meli's company and industry data, Brazil is the largest single market in Latin America, accounting for about 44% of the total e-commerce market in the region in 2024. Secondly, the second-largest market is Mexico, accounting for about 33% of the regional industry total. It can be seen that Brazil and Mexico together account for nearly 80% of the regional industry total, and they are inevitably the main target markets for e-commerce companies. The subsequent discussion will also focus on these two countries.

② Although Latin America is an 'emerging e-commerce market,' past growth has not been fast

Although Latin America and Southeast Asia are both emerging e-commerce markets, and the current industry scale is at the same level, before the pandemic, the growth rate of the e-commerce industry in Latin America was actually 'lukewarm,' significantly slower than the growth of the Southeast Asian market during the same period.

According to statistical data, the annual compound growth rate of the e-commerce industry in Southeast Asia from 2015 to 2019 reached 62%. In contrast, the compound growth rate of the three largest markets in Latin America, Brazil, Mexico, and Argentina, from 2016 to 2020 was only between 19% and 45%, which is clearly not fast for a market still in the early stages of the industry.

According to another agency's forecast data, the growth rate of the overall e-commerce industry scale in Latin America was only about 13% to 19% in the two years before the pandemic, and after the pandemic dividend period (2022-24), the industry growth rate quickly fell back to only 10%+.

It can be seen that although the Latin American e-commerce market is a small-scale emerging market, historically, except for the two years of the pandemic dividend period (2020-21), the growth in other years has not been high.

Dolphin Research believes that this is also one of the main reasons why Meli's historical revenue growth was not high before the scale of its second curve, the financial business, took off.

③ The economic growth in Latin America is not vibrant

From a macro perspective, one of the underlying reasons why the growth of the e-commerce industry in Latin America has not been high is that the macroeconomic growth of major Latin American countries is not vibrant. Similarly, compared to Southeast Asia, one of the reasons for the good development of e-commerce in Southeast Asia is that the region has a fast-growing population with a high proportion of young people, and the economic growth rate is relatively high (the annual compound growth rate of GDP in the region from 2010 to 2020 reached 4.2%). A vibrant population and macroeconomic environment can provide fertile ground for the development of emerging industries such as e-commerce.

In contrast, the compound GDP growth rate of the three largest economies in Latin America from 2014 to 2024 was only between -1.2% and +3.1% (measured in USD). Moreover, Brazil, with the largest population and economic size, performed the worst, resulting in a weighted average compound GDP growth rate of only 1.5% for the five major Latin American countries, significantly lagging behind Southeast Asia. The weighted compound growth rate of the final consumption expenditure indicator, which reflects consumption expenditure, was also only 1.7% over the past 10 years.

A piece of good news is that possibly benefiting from the global monetary easing during the pandemic, the economic and final consumption growth rates of various Latin American countries have significantly increased in the past five years, with the weighted average compound GDP and final consumption growth rates rising to 5.2% and 4.3%, respectively.

The stronger macroeconomic growth in Latin America over the past five years has indeed corresponded to the high growth phase of Meli's various businesses. (However, looking forward, it is uncertain whether the economic growth in Latin America can maintain the relatively high growth after the pandemic, which Dolphin Research will further explore in the valuation section).

④ Low penetration rate of the online economy, but the speed of improvement is not fast even with a low base

Due to the overall economic and consumption expenditure growth in Latin America not being high, the growth rate of the e-commerce industry in Latin America depends more on the speed of improvement in online consumption penetration. The actual situation is:

On the one hand, the online consumption penetration rate in Latin America is significantly lower compared to other global markets, logically having significant room for improvement;

On the other hand, the online penetration rate in the Latin American market did experience a rapid increase during the two years of the pandemic dividend period (2020-21), but then quickly slowed down again.

According to institutional statistical forecasts, the overall online consumption penetration rate in Latin America was only about 6% in 2019, with a huge gap compared to online economy-developed countries like China and the US. (According to different institutional forecasts, the gap can be 4-5 times). During the pandemic dividend period, the online consumption penetration rate increased by about 7 percentage points in the two years of 2020-21, but in the subsequent three years of 2022-24, it only increased by about 1 percentage point in total. (Note: Different institutional forecasts of online penetration rates may have significant differences and cannot be compared across institutions)

Summarizing the above points ①~③, it can be preliminarily judged that the e-commerce industry in Latin America is not a market with obvious growth dividends. Historically, the overall economic and consumption growth in the region has not been high, and the speed of improvement in online penetration has not been fast even with a relatively low base, except for the pandemic dividend period. These factors together lead to the growth of the e-commerce industry in Latin America being not high except for the two years of the dividend period. (Measured in USD, the growth rates in 2018, 2022-24 were only slightly above 10%)

In other words, e-commerce companies with Latin America as their main market cannot enjoy obvious industry dividends, and Dolphin Research believes that on the one hand, this is one of the underlying reasons why Meli's historical performance growth was not outstanding before 2019; on the other hand, since the overall industry growth is not fast, it is particularly important for Latin American e-commerce companies to achieve stronger growth by increasing market share and expanding business margins.

III. What is Meli's market position in the Latin American e-commerce market, and what are the influencing factors?

According to the analysis above, since increasing market share is particularly important for e-commerce companies in Latin America, what is Meli's market position in the Latin American e-commerce industry?

First, the judgment is that if the Latin American region is regarded as an overall market, Meli has an absolute leading market share and scale advantage, with no visible competitors; however, in individual country markets, especially in the two largest markets of Brazil and Mexico, Meli is also the market leader, but not without competition.

1. The market is still fragmented, and Meli is the undisputed leader

According to Euromonitor's estimates, in 2023, Meli occupied about 26% of the entire Latin American e-commerce market, which is not very high from an absolute perspective. However, from a relative perspective, the second-ranked Amazon's market share in Latin America is only 5%, with a cliff-like gap compared to Meli.

It can also be seen that the market concentration of the Latin American e-commerce industry is significantly low, and the market is still quite fragmented. For example, in China and the US, the largest players in the regional markets, Amazon and Alibaba, have market shares of around 40% in their respective markets, far higher than Meli.

According to the data below, in 2023, the CR7 (the total market share of the top 7 players) in the Latin American e-commerce industry was only about 41%, while the CR7 in the Chinese e-commerce industry was as high as 85% during the same period. From this perspective, the Latin American e-commerce industry theoretically still has a very large space for market share integration, and increasing market share can be an important growth logic for e-commerce companies in Latin America.

In summary of the individual country markets, except for the Argentine market where Meli has an absolute market-leading advantage, in the Brazilian and Mexican markets, Meli's market share in 2024 is about 1/3 and 1/5, respectively, accounting for a relative majority but not an absolute majority. Dolphin Research will further explore the largest market, Brazil, in more detail later.

2. From Meli vs. Shopee, why can Meli become the leading giant?

In Brazil, the largest market in Latin America, there are three leading e-commerce platforms: the regional leader Meli, Shopee under Sea, and the local Brazilian platform Magazine Luiza. According to institutional estimates, in 2024, these three platforms accounted for 34%, 15%, and 11% of the Brazilian e-commerce industry, respectively.

In comparison, Dolphin Research believes that the models and positioning of Meli, Shopee, and Magazine Luiza can be roughly compared to China's Taobao, Pinduoduo, and JD.com:

① Similar to Taobao, Meli is the earliest, largest, and most widely used e-commerce platform in Brazil. The model is primarily platform-based, offering the most abundant product supply, mid-range product pricing, and relatively better delivery and other services. Although there are many competitors, it is still the undisputed first choice for Brazilian residents for e-commerce shopping.

② Shopee Brasil can be seen as Brazil's 'Pinduoduo,' initially entering Brazil mainly through a cross-border e-commerce model and has now basically transformed into a localized e-commerce platform (it is reported that local sellers account for over 90%). In terms of strategy, Shopee Brasil is also mainly labeled as extremely cost-effective, offering high subsidies and mainly selling low-priced products. It also pays great attention to social fission and live e-commerce models, with rapid growth in its Brazilian business.

Currently, Shopee Brasil is also beginning to transform towards 'quality,' increasing the supply of higher-priced branded products, and also starting to build its own warehousing and fulfillment facilities to reduce the gap in fulfillment timeliness and experience with Meli.

③ Magazine Luiza is somewhat similar to Brazil's 'JD.com.' The platform's model was originally based on offline physical supermarket retail as the main business, gradually transitioning to maintaining online channels, with the online proportion now exceeding 70%. Unlike Meli and Shopee, which are primarily 3P platform models, Magazine is still mainly self-operated retail (by 1Q25, the ratio of 1P to 3P model GMV was about 6:4).

In terms of platform positioning, because it originated from supermarket transformation and is mainly self-operated, the number of SKUs is relatively the least, and product prices and quality are relatively higher, with higher timeliness in areas with stores through store delivery, but in remote areas without stores, the delivery timeliness is still inferior to Meli.

From the perspective of results, Meli is undoubtedly the largest and most successful e-commerce platform in Brazil, but what specific factors make Meli stand out? Dolphin Research has already provided a summary conclusion earlier, and the following will explore the reasons based on the classic 'save, more, fast, good' four elements of retail channels through a comparison between Meli and its biggest competitor, Shopee.

① In terms of 'more,' although there is no accurate and official data to measure the overall SKU quantity on the Meli and Shopee platforms, most news reports and surveys show that the product richness on the Meli platform is significantly higher than that of Shopee.

According to a certain institution's statistics, except for the fashion (apparel) category where Shopee has an advantage, in most product categories, the SKU quantity on Meli is about 20% to 50% higher than that of Shopee. In other words, Meli can offer consumers more and richer product choices.

② In terms of 'save,' most market statistics and surveys show that the overall pricing tone on the Shopee platform is lower than that of Meli, and Shopee's 'cost-effectiveness' label is more prominent in consumer perception. However, this was more evident in the early days of Shopee's entry into Brazil, and the price gap between the two platforms for similar products should have narrowed by now.

From the following two different institutional surveys, it can be seen that in the first survey, out of 10 similar products, Shopee's pricing is lower than Meli's in 7 cases, accounting for the majority. Another survey mainly targeting apparel products (Shopee's advantageous category) shows that Shopee's average pricing is about 7% lower than Meli's.

In addition to third-party surveys, according to the official data disclosed by the company, the average order value of Meli in the Brazilian market is about $25 (which has significantly decreased after the pandemic). In contrast, Shopee's average order value in the Brazilian market is estimated to be no more than $10.

In summary, for similar products, Shopee is generally priced slightly lower than Meli, but the gap is not very significant. This is mainly because the overall product supply structure on Shopee has a higher proportion of low-priced products, resulting in Shopee's average order value being far lower than Meli's.

From another perspective, according to HSBC's survey in 2022 on the preferred e-commerce platforms of Brazilian consumers with different income levels, Meli is basically the preferred platform among people of all income levels in Brazil (with a preference rate of 20% to 27%). In contrast, Shopee shows a significantly high preference rate among low-income people, but the preference rate quickly decreases as income levels increase (note that this is a survey from 2022, and Shopee's recognition among high-income people should have improved by now).

③ In terms of 'fast,' due to the natural geographical environment and logistics infrastructure constraints in Latin America, fulfillment is a major bottleneck for e-commerce business in the region. In this regard, Meli began building its own fulfillment capabilities as early as 2014, and currently, the vast majority of orders (over 90%) are self-delivered, making Meli's fulfillment timeliness and experience in Brazil among the first tier. (This will be discussed in more detail later)

Shopee, on the other hand, initially relied on a cross-border model and third-party delivery, resulting in a significant gap in delivery timeliness and experience compared to Meli. However, in the past 1-2 years, as Shopee has also started building its own fulfillment capabilities, the gap in delivery timeliness and experience with Meli has narrowed.

In terms of data verification, Dolphin Research summarized the delivery time required for some similar products on Shopee and Meli from JPM's regular reports. After averaging, it is clear that since 2021, Meli's delivery timeliness has always been faster than Shopee's, but the gap is now relatively limited. (Note: Due to the different products and delivery addresses selected in different years, the data from different years is not completely comparable, mainly focusing on the gap between the two platforms in the same statistics)

④ In summary, in the four dimensions of 'save, more, fast, good,' Meli is the best in the industry in three dimensions except for 'save,' which is one of the fundamental reasons why it has become the largest e-commerce platform in Brazil.

However, although Meli still holds a significant advantage in Brazil, it can be seen that as Shopee tries to increase the proportion of quality products and also builds its own logistics, the gap with Meli is gradually narrowing.

Currently, Shopee is undoubtedly Meli's most threatening competitor. According to media reports, in 2024, Shopee's GMV in Brazil has reached 40% of Meli's, and in terms of quantity, it has even surpassed Meli (but Shopee's average order value is less than half of Meli's).

Moreover, as Temu and Tiktok Shop are also vigorously expanding the Brazilian market (we will discuss this in more detail in subsequent articles), it can be seen that in Brazil, the largest market in Latin America, the competitive environment Meli faces in the future is not without challenges.

(The following table compares various indicators of Meli and Shopee at the beginning of 2025, which you can check for yourself, and we will not elaborate)

3. What about the situation in Mexico & Argentina?

Due to space limitations, the markets of Mexico and Argentina will not be discussed in detail, only a brief overview will be provided.

First, in Meli's founding place and headquarters, the Argentine market, Meli has an absolute leading market share, with no significant competitors. Dolphin Research believes that the main reasons why Meli can dominate the Argentine market include the exaggerated inflation and currency depreciation in Argentina in recent years, and the strict foreign exchange controls implemented before April 2025, making overseas platforms generally not consider the Argentine market.

In the Mexican market, it is a duopoly market with Meli and Amazon each occupying about 20% of the market share. Compared to Amazon's 'unremarkable' performance in the Brazilian market, it is a strong competitor to Meli in the Mexican market. Simply put, one of the main reasons for Amazon's better performance in Mexico is that geographically, Mexico belongs to North America and is directly adjacent to the United States, allowing Amazon to better leverage its existing fulfillment capabilities in the US.

The table below also provides a comparison of various data between Meli and Amazon in the Mexican market, with little difference between the two. Dolphin Research will not elaborate further.

IV. E-commerce + Logistics + Payments, a complete business closed loop

From the perspective of the e-commerce platform, it can be seen from the above that Meli has achieved the best or second-best in the four elements of 'save, more, fast, good.' Expanding the view further, in the large business closed loop of e-commerce + logistics + payments, Meli's performance in the latter two is also impressive, jointly forming its business moat.

1. Logistics—the most fundamental barrier in Latin American e-commerce?

As one of the most fundamental differences between online and offline consumption, fulfillment is the key final step in completing e-commerce transactions. It can be said that one of the core reasons why the scale and penetration rate of the Chinese e-commerce industry can lead the world is the highly efficient (low-cost) and almost public facility-like express fulfillment capability. In contrast, one of the main bottlenecks for the low penetration rate of e-commerce in emerging markets such as Latin America and Southeast Asia is the difficulty of logistics fulfillment, especially in Brazil.

① The geographical environment in Latin America naturally restricts fulfillment logistics

First, the biggest limitation of 'difficult express fulfillment' in Brazil is determined by its geographical and population distribution, which is not easy to change. Combining the population distribution and topographic map of Brazil below, the population and major cities of Brazil are concentrated along the eastern coastline, while the central part of the country is separated by the Amazon in the northwest and large mountainous areas in the southeast. This results in Brazil's major economic areas not being connected in a block but distributed in a winding and narrow linear area along the east coast, naturally creating difficulties for efficient logistics transportation.

Due to the above geographical constraints and the unstable public security in Latin America (theft, strikes, etc.), if relying on third-party logistics that the platform cannot directly control, the timeliness and stability of online shopping are generally poor.

According to HSBC's survey on the time required for online shopping fulfillment by Brazilian consumers, while China has long achieved next-day or same-day delivery, in 2018, the proportion of deliveries taking 5 days or more was 81%, and by 2022, the proportion still reached 58%.

② Meli builds its own logistics capabilities as one of its core barriers

Due to the obvious shortcomings in fulfillment, as mentioned earlier, Meli began to establish its own fulfillment team as early as 2014 to replace third-party logistics.

Currently, the fulfillment methods used by the Meli platform can be divided into three categories: drop-shipping, cross-docking, and fulfillment. Specifically:

Drop-shipping: This is the most traditional fulfillment form, where the platform almost does not participate in any fulfillment process, and the merchant independently selects the fulfillment delivery company to complete the fulfillment. The timeliness and quality of fulfillment depend entirely on the third-party company.

Cross-docking: This is the JIT (Just in Time) model in China. In this model, after the consumer places an order, the merchant first sends the goods to a logistics center managed by Meli, and then Meli is responsible for packaging, sorting, and delivering to the buyer. Compared to the drop-shipping model, it can significantly improve the timeliness and stability of delivery.

Fulfillment: Similar to Amazon or JD.com's warehousing and distribution model, merchants send goods to a storage center managed by Meli in advance. After the consumer places an order, Meli directly delivers the goods, further improving delivery timeliness.

According to the company's official disclosure, the proportion of orders with Meli-managed logistics (Managed Logistics, including cross-docking and fulfillment forms) has rapidly climbed from about 10% in 2017 to over 94% by the end of 2023, and the proportion of self-managed logistics began to rise rapidly around mid-2018 (i.e., two years before the pandemic). The choice to accelerate the construction of self-managed delivery in advance allowed the company to better enjoy the dividends brought by the pandemic to online retail.

According to JPM's estimates, in the third quarter of 2024, the proportion of warehousing and distribution forms in Meli's self-managed logistics reached about 53% (only about 7% in the first half of 2019). In other words, the warehousing and distribution form with the best timeliness and experience has become the mainstream logistics fulfillment form for Meli.

As a result of Meli's rapid iteration in fulfillment capabilities, according to the company's disclosure, since early 2021, the proportion of all orders that can achieve same-day or next-day delivery has remained above 50%. In a short period of 5-6 years, Meli's fulfillment experience has evolved from primarily merchant self-delivery to a level comparable to Amazon and JD.com, which are among the best globally. This experience is a dimensional reduction strike in the underdeveloped Latin American region.

4. Summary

In summary, for the e-commerce segment of Meli, which is the focus of this article, it can be seen that:

① The Latin American e-commerce market is not one with obvious dividends. Except for the two-year short dividend period after the pandemic outbreak, the growth of the e-commerce industry in the region before and after the pandemic is not fast. Companies in the industry cannot 'lie down and win' by relying on industry dividends, and more rely on their own competitive advantages to capture the market.

The online penetration rate in Latin America is still significantly low, logically having considerable room for improvement, but historically, except for the two years after the pandemic, the speed of penetration rate improvement has not been fast. It belongs to a long-term space, but it is not easy to determine when the acceleration inflection point will arrive in the short to medium term.

② In the Latin American e-commerce industry, Meli is an absolute leading platform, occupying the largest market share in the largest markets such as Brazil, Mexico, and Argentina (a relative majority rather than an absolute majority). However, in Brazil and Mexico, Meli still faces competition from Shopee, Amazon, and new entrants like Temu and TikTok, and is not without challenges, and the competitive pressure may gradually increase.

However, from a long-term perspective, the overall market share of the top 7 e-commerce platforms in Latin America, CR7, is only 41%, so even with competition, there is room for leading e-commerce platforms to jointly increase market share.

③ The key factor for Meli to be the leader in the Latin American e-commerce market is that it has achieved the best in the industry in three of the four elements of 'save, more, fast, good.' It provides the most abundant product supply, is recognized by the most consumers, and its logistics fulfillment offers a world-class warehousing and distribution model in an underdeveloped e-commerce region, with excellent fulfillment timeliness.

However, currently, competitors like Shopee are also learning from Meli's operations, quickly approaching in terms of product variety and logistics experience.

The above is Dolphin Research's summary of this article. However, in addition to the above content, Meli's most popular financial payment tool in Latin America is also one of the elements that constitute its e-commerce business moat.

Moreover, as mentioned in the first section of this article, one of the reasons for Meli's explosive performance and stock price since 2019 is that the financial payment business has moved beyond its auxiliary position to the e-commerce business, rapidly growing into another pillar nearly equivalent in scale to the e-commerce business. For Meli, financial payments are an equally important business, and in terms of future imagination, it may even be larger than e-commerce. Therefore, Dolphin Research will explore Meli's financial payment business in the next article.

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