MercadoLibre’s Net Revenues Rise To $1.3 Billion As Open Banking Picks Up

MercadoLibre said that net revenues rose to $1.3 billion — in U.S. dollars, up nearly double from the same quarter a year ago. However, the company posted a net loss of $50.6 million, resulting in net loss per share of $1.02.

“Our strong performance during the quarter further established our leadership position in Latin America, which is the world’s fastest growing region for eCommerce, according to e-Marketer,” said Pedro Arnt, chief financial officer the Buenos Aires, Argentina-based company. “These positive market dynamics, combined with our strong execution and focus, are reflected in our quarterly performance, where growth continued accelerating despite the gradual reopening of physical retail during the period.”

MercadoLibre is an eCommerce and payments company that operates an eCommerce marketplace. In addition, the company gained a license to operate as a financial institution (FI) in Brazil last November.

“Open banking is undoubtedly the new paradigm toward which the most modern societies are advancing,” said Paula Arregui, chief operating officer for Mercado Pago, the payments unit for MercadoLibre. In an interview with PYMNTS last year, he added that, “However, it is not simply a technology or a regulation.” For example, he added, in Latin America “there is an inequality in terms of the acceptance and regulation of open banking.”

In Brazil, for example, more than 45 million consumers remain unbanked — meaning they do not use FIs at all. The open banking initiatives sprouting in Latin America have an opportunity to address the unique needs of these individuals.

Stelleo Tolda, Mercado Libre’s president for commerce, told Bloomberg that the company plans to pour a record $1.8 billion into Brazil in 2021, more than double last year’s spending. That’s about the same investment it made in the country over the past four years.

The company has said already that it planned to set up new distribution centers for Brazil.

Ongoing efforts to shorten delivery time continued to bear fruits as the number of new users keeps rising, Tolda told Bloomberg. “Feedback from clients on our logistics network has been quite positive and that is a key point of our investment strategy,” he said.