If you know Mercado Libre you know of its great popularity and constant growth. 

What began as a start-up of entrepreneurs became a multinational company with more than 20 years of experience, operating in 18 countries and listed on Nasdaq (the second largest stock exchange in the US)

Learn everything about this business model with an entrepreneurial culture and a clear vision.

An innovative and profitable business model

Creating from nothing and from Argentina and becoming a multinational with high profitability, has earned Mercado Libre great recognition in Latin America and also in other non-Spanish speaking countries.

20 years ago the market was already beginning to herald the expansion of online stores as the most convenient and fastest alternative to physical stores.

Since the 2020 pandemic, the giant and popular e-commerce company continues to grow and expand, also opening the opportunity for other online commerce companies to try their luck. 

Who created Mercado Libre? 

Mercado Libre was founded in 1999 by Marcos Galperín, who before creating his company, was an employee in finance at YPF, who sponsored him a postgraduate degree at Stanford University.

But during its course, the company Repsol acquired YPF and the finance department closed.

For Galperín this did not mean a failure, but rather the opportunity of a lifetime, as they say, “everything comes for better”, the lack of employment became the perfect excuse to create his own business. 

He began to develop his idea, but he was not alone, he had to ask his university professors for advice to achieve it and thus, he got the investor he needed for his project. 

How does Mercado Libre manage to democratize electronic commerce?

The Argentine company that was born in a garage in the Saavedra neighborhood, in the city of Buenos Aires, today has operations in:

Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Uruguay, Venezuela, Honduras, Costa Rica, Guatemala, Mexico, Nicaragua, Panama, Dominican Republic, Paraguay and Peru.

• Two years after its launch, in October 2001, MercadoLibre signed an agreement with eBay through which it became the main shareholder of the company, then acquired the operations of iBazar in Brazil and both companies became exclusive partners for Latin America.

• In November 2005, MercadoLibre.com obtained operations from DeRemate.com in Brazil (where it was called Arremate.com) and was annexed to Colombia, Ecuador, Mexico, Peru, Puerto Rico, Uruguay and Venezuela.

• At the end of 2006, Mercado Libre began operating in Costa Rica, Panama and the Dominican Republic.

• In August 2007, Mercado Libre made its initial public offering of shares on the NASDAQ to be listed on the Stock Exchange.

The differential value of Mercado Libre

By registering on your website or App, people can sell and buy products, both new and used, at a fixed or variable price, either in one payment or in installments.

One of the most important and well-known services of Mercado Libre is Mercado Pago, a payment platform for consumers, and collections for sellers.

Another success is the incorporation of MercadoEnvíos, where products travel to their destinations in a safe and organized manner, providing speed and confidence, since the consumer can monitor their order at its different stages.

The company took risks and created an ecosystem of integrated solutions, which is also what its constant innovation is about.

How does Mercado Libre work today?

Currently, the e-commerce unicorn is betting heavily on the development of an ecosystem of financial services and online sales in LATAM.

Since its creation, it has done nothing but generate profits and expand its horizons to different countries, even outside of Latin America. 

However, the most relevant e-commerce company in Latin America, born and headquartered in Argentina, is not as profitable in its country of origin (we will see why)...

It is in Brazil and Mexico where it manages the greatest amount of income, 70%, compared to only 24% in Argentina and 6% in the rest of the countries.

• MercadoPago is also gaining relevance in Brazil and Chile, thanks to the online payment method with credit card, or via QR, which allows buyers to purchase a product without having to go to a physical store. To this we add the appointment of the Central Bank to MercadoPago as a financial entity authorized to manage payments.

Mercado Libre is not only an e-commerce platform to purchase all kinds of products, new or used, but it is also becoming a financial entity, which allows people to manage their online payments as if it were a credit card generated by a bank.

Mercado Libre's current strategy

Let's look at some more points about the strategies and updates that the company is focusing on today:

• Introduce an ecosystem of financial services from an e-commerce platform in LATAM.
• Maintain a strong distribution and logistics network in the Brazilian market, as well as that of Mexico, where it has its own land and air fleet, which allows them to make deliveries in less than 24 hours. 

• Associate MercadoLibre with multinational brands and create new strategies, such as the case of Nissan, where on different platforms customers can search, quote and reserve their vehicle, and then initiate contact with a commercial representative of the brand and thus achieve real-time interaction safely.

Why doesn't MercadoLibre receive high profit percentages in Argentina, where it was born?

Now yes, MercadoLibre is a very profitable company in most Latin American countries, but not in Argentina. The answer reminds us of the phrase “no one is a prophet in his own land.” However, the reasons are different.

The reality of Argentina shows that it has been going through an economic crisis for decades, characterized by periods of recession, inflation, currency devaluation, high external debt and slowdowns in imports; This is slowing down economic development at the local level. 

That is why it is no coincidence that even for highly profitable companies it is difficult to achieve higher income in the country.

This is why the best strategies will be aimed at the international market.

In conclusion, MercadoLibre is another positive example of companies that are innovating and reinventing the e-commerce business model.

By incorporating financial services so that consumers find an easier and safer way to issue their payments and manage their credits, they made a leap towards digital transformation.

This is why MercadoLibre currently represents the most advanced form of free trade in Latin America and is projected to the rest of the world.

Read other examples of innovation in business models in the section of our web.

Follow us on social networks to stay in touch with our team and the latest news.