Chapter 1: What is the background of Mercado Libre and its significance in Latin America?
We have a very solid business and we've had a solid business in periods of high inflation, of low inflation, etc. Because as long as you have great price, great convenience, the fastest shipping, people will buy from you.
That was MercadoLibre Senior Vice President Leandro Cuccioli. I'm Motley Fool producer Matt Greer. Now, MercadoLibre is a leader in the e-commerce and e-payments business. It's Latin America's largest company by market cap and is often referred to as the Amazon of Latin America.
Motley Fool analyst Asit Sharma recently talked with Cuccioli about opportunity, volatility, and the business of MercadoLibre.
Hello, Fools. I'm Asit Sharma, Senior Analyst and Lead Advisor at The Motley Fool. My guest today is Leandro Cuccioli.
Chapter 2: How has Mercado Libre achieved consistent revenue growth?
He's Senior Vice President of Corporate Development, Strategy, Sustainability and Investor Relations at Latin American e-commerce giant MercadoLibre. Leandro holds an MBA from Stanford University, and he was previously head of consumer services and social infrastructure investments at British International Investment, the UK's impact investor and development financed institution.
Today, we're going to discuss MercadoLibre's third quarter 2025 results, as well as broader operational and strategic topics that are essential to understanding this dynamic business. Leandro, welcome to The Motley Fool. Thank you, Asit. It's great to be here. Wonderful.
So I know you wanted to start off the conversation with a nod to the incredible streak of growth that MercadoLibre has thrown off. So I'll let you dive right in with this 30% growth rate that we've seen for so many quarters.
Yeah, you're right.
Chapter 3: What is the current state of e-commerce penetration in Latin America?
We think we are the only company in the world that has sustained 27 consecutive quarters of revenue growth, about 30%, in this case 39% for the third quarter of 2025. And I think it's testament to the big opportunity that we see in the region, right, that probably you have discussed with us in the past. You know, when you look at Brazil or Mexico or Argentina, our three main geographies,
you see GMB or, you know, the gross volume of merchandise transacting our platform growing well above 30%, right? Ship items growing at more than 42% in Brazil. So that means that a lot of people are still coming online to buy, sometimes for the first time. You know, in Brazil, we had 29% growth in unique buyers, right? So that's, you know, at the scale of MercadoLibre with more than 100 million
unique buyers in the last 12 months is quite unique, I think, in the world to have 29% more folks coming to buy online. And the same can be said on the fintech side, because it's a region that unfortunately in the past hadn't had the access to financial services that probably in developed markets people are used to now, right? Here in Mexico, 15% of the people have a credit card.
It's insane, right? Only 15%. So that explains why Mercado Pago, our fintech side of the business, continues to grow also users at a clip of around 30%, reaching 72 million monthly active users. And that's payments, savings...
credit and everything that you need for a modern life right so we're very excited um you know about the third quarter but moreover we're very excited about the opportunity ahead
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Chapter 4: How does Mercado Libre navigate economic volatility in Argentina?
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I think it's interesting for those who haven't followed MercadoLibre to see these long streaks of consecutive growth and understand that the market itself still is relatively immature. So put you on the spot right off the bat. Thinking about both the e-commerce side and the fintech side, how long can MercadoLibre sustain this growth rate?
At what point do you go to being, let's say, a 20% to 30% goer on that top line?
Look, I mean, time will tell, right? I mean, in terms, but of course, you know, growth over time needs to converge. But in the short term, what we see as it is that you see penetration of e-commerce in Latin America in the mean teens, right? I mean, compared to you know, probably third in the US and Europe, 40, 50% of e-commerce penetration in China. So the market can be two, three times larger.
We are taking of that market on a marginal basis in LATAM, probably, you know, two-thirds of that market, of that growth, right? So, you know, when you see that, on average, a customer in MercadoLibre shops nine times a year, and in developed markets, you know, similar platforms are around 50. you see this kind of huge gap still.
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Chapter 5: What role does fintech play in Mercado Libre's business model?
I mean, I know we're big, right? And people say, well, how much bigger you can be? But we're still probably 5% of the retail market in Latin America, right? Mercado Libre. Imagine a retailer that has 5% of market share. So there is huge potential on that side. And I would say on...
the side of FinTech, if you look at any market share of what we hold, but not only us, take the other FinTechs as well, we're still a fraction of the big banks in LATAM. One thing that Latin America still has is that very concentrated deposit and credit on a handful of banks, right? So if you take
Brazil, probably 10 years ago, it was 80% of the credit and the loans and the deposits in five banks. Now it's 60%. But if you take a developed market, it would be around 45. But if you take Mexico, you're still at 80% in five banks. And if you take us,
you know probably you have single digit market share in in credit cards single market share in deposits etc so there is huge room for growth right so i don't see in in the next quarters to come the trajectory changing dramatically over time of course right i mean you cannot grow you know 30 forever but it's amazing that you know we still grow at startup rates even today because the market is so huge and i think that is something that people need to
realize that it's very early.
Right. You've got the concentrated banking and deposits as targets, and you also have such a large population still of unbanked customers or young customers that are coming online with their first experiences in digital payments, with credit cards and the like.
I wanted to shift just for a moment, and I promised myself I'm not going to make this about Argentina, but I know many of those who, again, aren't as familiar with MercadoLibre might not understand the experience that this business has with volatility in the region.
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Chapter 6: How is Mercado Libre leveraging technology for operational efficiency?
But it is a big market, so if we could take just a couple of minutes to discuss the change that's underway there. recent events and how MercadoLibre deals with volatility in these big markets that make up the brunt of net income and also revenue growth in the region.
Yeah, so we were born out of volatility, I think, right? I mean, 1999 Argentina, August, that's when, you know, Marcos Galperin started the business and right off the bat, you know, the bubble burst and Argentina, that was the core market, defaulted into 2001.
So I think that over the last 26 years, MercadoLibre in Latin America, I mean, if you are going to be in Latin America over time, you need to understand that things will become volatile from time to time, to put it in a nice way. In the case of Argentina, we have an amazing business, right?
If you look at MercadoPago, more than 60% of the population uses MercadoPago in a daily basis to buy stuff, right? I mean, the QR code has become... the pervasive method there, like in China.
Right. I'm seeing that in India too, by the way. We were chatting before we taped. I was just there. A lot of QR code payments with Paytm, et cetera. So we're seeing this in developing economies.
The same. I think I've been several times to India and you see some kind of the same movement of cash being replaced at a very fast speed, even disappearing.
MercadoLibre also, from the MercadoLibre side, from the marketplace, has been the leading company in Argentina for a long time, with a system that the brand equity, the perception of the consumer is so ingrained, almost it has defined the category Right?
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Chapter 7: What are the cultural values that drive Mercado Libre's success?
So, you know, just search it in MercadoLibre. It would be the first thing that you tell your kids when they, you know, are looking for something, right? It becomes the destination, right? And the same with Mercado Pago. Now, we've seen the country going through different phases, right? We are coming from a period of very high inflation at the end of 23.
And then this administration that started at the end of 23 has brought inflation down quite significantly. And that has created a big adjustment in the economy. So we navigated a difficult Q1 of 24, in which, for the first time, we had negative ship items growth in the history. There was a huge recession and adjustment in Argentina in Q1, 24. But then from Q2, and we actually published that,
From Q2, 24, we started to see a markedly improvement. It's not unheard of that when you lower inflation so much, the real purchasing power of people improves, right? So credit returns and all those other things, our credit book in Argentina quadrupled over a year. and from a very low base. But that means that if you have good macroeconomic stability, then it's easier to conduct business.
And that's what we've been seeing, right? We've seen Argentina performing very well for us. What I always tell investors is we don't know what's going to happen, right? We never know.
Chapter 8: What future opportunities does Mercado Libre see in the market?
We have a very solid business and we've had a solid business in periods of high inflation, of low inflation, et cetera, because as long as you have great price, great convenience, the fastest shipping, people will buy from you. Now, we're very optimistic in the short term that if things continue to be in this way, you know, the market can be much, much bigger than what it is today, right?
So it can be a huge market. but we don't control what we don't control. So we try to play with the cards that we're given.
Crazy side question. Are you all keeping an eye on the development of quantum computation as a possible solution for route optimization?
Well, more than one eye, probably two. Yes, we are quantum computing. We spend a lot of time in China. And we see the team just came from there, the shipping team. And quantum computing and robotics are areas in which we are extremely invested in terms of understanding, following, adopting. There is a potential in the next few years of, you know, radical changes in productivity.
And I think for us is, you know, how much of that with the realities of the region we adapt, we tropicalize in a way at the right pace. But we're very excited about those things. And I think, again, I can only see that allowing players like us to have more resources to keep removing the frictions to mean more people to the markets. I'm very optimistic on that side.
Leandro, I want to move on to the second removal of friction that you mentioned. But before we do, I'm sure you're interested in user interface design and user experience. So my question to you is, what's the last purchase that you made on the MercadoLibre platform?
I'm doing my motorcycle license test in Mexico this week. And you need to test by doing some exercises in which you need to go through cones. I bought some cones, like those cones that you see in the street, to practice. And I got them this week, and they were 138 pesos. which you can divide by kind of 20, you know, it's called it, you know, $10, you know, whatever, say $9.
And I got that, you know, I could get them the next day for 51 pesos or wait until Tuesday. That was my free delivery day. And a slow way. And that's the way I chose. So, you know, you see an example there of how this works in practice. You know, it was 51 pesos. I could have paid it. But then, you know, in three days you get it for free, you know, and I got them on Tuesday.
I need to practice tomorrow morning because tomorrow is the test. So wish me luck.
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