Despite a challenging economic environment characterized by high-interest rates, slowed consumption, and competition from Asian markets, Latin American e-commerce giant Mercado Livre (MELI) continues to thrive.
The company has reported double-digit growth, significant market share gains, and profitability improvements.
It has also made notable progress in financial services, creating an integrated journey for sellers and consumers.
According to an interview with Bloomberg in linea, MELI’s executive vice president and chief marketing officer, Sean Summers, see significant potential for further growth in the firm’s two main business verticals: e-commerce and fintech, specifically its payment platform Mercado Pago.
However, Summers also highlights other opportunities enabled by advancing technology and scaling. One of these opportunities lies in evolving the company into a powerful media platform.
To make it a media platform, summers want to leverage MELI’s unique advantage – the recurrent volume of people who use the platform, standing at 100 million active users in the first quarter of 2023.
The company’s advertising business unit, Mercado Ads, offers solutions for advertisers, whether they’re involved in e-commerce or not, broadening the platform’s media potential.
MELI aims to go beyond traditional Retail Media by offering assertive ads that resonate with the consumer’s purchasing moment.
Although MELI has not disclosed specifics about the numbers and impact of Mercado Ads, it’s worth noting that advertising revenue at Amazon, a competitor, reached US$9.5 billion in Q1 with a 23% annual expansion free of exchange rate effects.
This underscores the potential that MELI could tap into with its advertising branch.
MELI’s strategies for medium and long-term growth focus on two primary opportunities. First, the company plans to capitalize on its existing e-commerce base, which has been in place for 24 years.
MELI aims to increase penetration, adoption, and frequency, thereby growing its category and market share. It constantly uses data analysis and customer feedback to refine its strategies, improve customer experience, and drive loyalty.
The second opportunity lies in fintech, where MELI has pushed for financial inclusion in Latin America.
The company plans to grow by innovating new products. Starting as an online payment system, it has now morphed into a one-stop shop for various financial services, ranging from payments to bills, technology to credit, and even crypto.
MELI is also keen on exploring new avenues, such as retail media. The company has been running its media business for over a decade but only understood its potential and value addition a few years ago.
Recognizing new opportunities and pain points for existing and potential advertisers, MELI decided to operate and perfect its media business.
In terms of marketing strategy, MELI is product-focused, starting from addressing consumer pain points.
After developing a product, they then decide on what vertical it fits into (fintech or e-commerce) and how it should be communicated. The company aims to innovate in different areas, like cryptos, to find new growth avenues.
MELI’s future growth opportunities include becoming a significant media platform beyond the specific budget of sellers wanting to accelerate their sales.
MELI aims to offer competitive solutions for ads, displays, and videos for advertisers, enhancing their reach to consumers at different buying journey stages. Leveraging data and technology, MELI hopes to execute this vision.
Finally, MELI continually uses data to understand its customers, gaining insights on improving the platform and overall customer experience.
They also use this data to understand how consumers perceive them, their strengths, and weaknesses, which informs product and brand improvements.