With 24 years in the market, the marketplace created by Marcos Galperín continues to lead the preferences of Latin American consumers. Investments in technology, better customer service and a desire to democratize commerce and payments characterize its most immediate goals.

2023 was a great year for Mercado Libre at the regional level. The Argentine digital unicorn closed a record third quarter, “in terms of exceeding its own growth objectives.” It obtained profits of over US$685 million and an expansion in all businesses and in the 18 markets in which it operates.

Far from settling for that, the great player in Latin American e-commerce wants to go for more. To do this, it will add new consumers, more brands to e-commerce , more SMEs and entrepreneurs, and also more offers and benefits that complement their shopping experience. Alan Meyer, general manager of Mercado Libre for Chile, Peru and Ecuador, spoke with AméricaEconomía about the achievements and growing challenges that the company faces in the region, as part of the e-commerce Special of the February edition.

Access the PDF of the e-commerce Special from the February edition of AméricaEconomía here.

-In Latin America the growth prospects for e-commerce are positive. How is Mercado Libre preparing to meet this growing demand?

Electronic commerce continues to increase its penetration in Latin America, even in challenging economic contexts. E-commerce reached a new level after the [Covid-19] pandemic and, in that sense, there is no sign of going back. There is a secular trend to move towards e-commerce , which has been going on for years. The pandemic accelerated this process and we have managed to maintain it with the same levels of transactionality and purchase frequency.

2023, even in very complex economic contexts at the regional level, was a year of great growth for Mercado Libre, where we achieved the highest number of transactions in our history. In countries like Peru and Ecuador, where the growth potential is even greater, we have managed to incorporate technology to continue democratizing and consolidating electronic commerce. Some examples in Peru are the strengthening of our logistics processes and the implementation of digital payments, which has had a very positive influence on the transaction approval rate. We also launched Protected Purchase, free shipping, interest-free installment payments in alliance with the main banks in the country, among others.

-How much have Mercado Libre's sales grown in the last year? What prospects do you have for 2024?

The scenario is different in each market. We are present in 18 Latin American countries and each one has its own complexities and contexts. Yes, I can say that 2023 was a great year for Mercado Libre at the Latin American level, where we even had a record third quarter in terms of exceeding our own growth objectives.

These results confirm that by investing in technology, we can improve the user experience and increase our profitability. But, above all, our commitment to growing profitably and sustainably is intact.

-What role does technology play in your digital strategy?

Our DNA is technology and that DNA drives us to always embrace change. That has helped us navigate these very changing times regionally. In fact, the Technology (IT) area is the core of our business and the engine that drives the growth of our ecosystem. We have more than 16,000 developers, with a higher technical level, 100% focused on developing technology-based products that are used by millions of people per year in the region and that are changing the way Latin Americans buy, pay, get paid, and access credit. and optimize their savings.

Our digital strategy, then, goes hand in hand with the development of professionals who have the skills and knowledge to understand the needs of our users. As a Latam company, we seek to democratize commerce and payments and, thus, improve the lives of our users and the people who sell their products on our platform. The democratization of electronic commerce not only focuses on reaching all corners on equal terms, but also on providing tools to sellers so that they can sell more and better, and that the user experience is first class.

-How much is the investment in Mercado Libre technology? What percentage of your income will be allocated this year for that purpose?

We are not disclosing investment amounts at the moment. Yes, I can reaffirm the value that technology has for us as a company. Therefore, a large part of our investment is destined to strengthen our operations and logistics processes, hand in hand with cutting-edge technology. Furthermore, in 2023 we announced a very robust hiring process, of more than 13,000 people, where we were able to incorporate 1,700 professionals to the Technology area, which is the heart of the company's operations. And it was clearly a good decision. In our last report, we obtained solid operational and financial results with improvements in all geographies, both in our e-commerce and fintech businesses. By 2024 we will continue investing in our technology, with the aim of continuing to innovate to create solutions to the needs of our users.

-How will you optimize the value offer for consumers?

Our value proposition to consumers is expressed, first, through the greatest offer available. This allows them to find everything they are looking for in one place. That goes hand in hand with a safe and efficient purchasing experience and, of course, with a network and logistics infrastructure that allows us to make faster deliveries in different countries. Year after year, we seek to deepen our connection with millions of people, understanding that we are much more than an e-commerce platform. We are an ecosystem that seeks to give you the best experience, with a competitive proposal and relevant benefits for your daily life.

-How to penetrate more markets or segments? For example, how is the online channel managed in secondary cities or provinces?

In all the countries where we operate, we seek to cover as much territory as possible. Obviously that has its peculiarities. Each country has its own logistical challenges and stadium levels. Latin America is very large and complex. Chile has mountains, Brazil has a jungle in the middle, Argentina has jungle, mountains, desert; Mexico and Colombia are geographically very complex. In countries like Chile, for example, we have almost complete coverage with our shipping network, but in others we still need a little more. In Peru we are still very fragmented in Lima. There are important cities such as Arequipa, Piura, Trujillo, Chiclayo and Cusco, where we have to arrive faster, safer and more efficiently. The strategic view to achieve this is through technological solutions that we manage to scale.

In countries like Ecuador, the challenge is not yet logistical, but rather adoption. We have to reach that market that today does not use digital channels, either due to ignorance or fear. For this, we focus on communicating, training and transmitting security. If we can get people who today are afraid to use the online channel to make their first purchase (or sale) and experience the convenience and security and the ease of receiving service, and even making a return if necessary, we know that they will be repeat buyers of the channel.

-What technological trends are going to be protagonists in e-commerce in the coming years?

We see a clear challenge in artificial intelligence, for example; a key tool to generate greater interaction and loyalty with consumers in real time and 24 hours a day. Currently, Mercado Libre uses it to improve the experience of users (increasingly more demanding) and to optimize internal processes. For example, we use generative AI to summarize user reviews. There are products that have many comments and, to facilitate this reading, what we did was automate, using AI, a summary of the most relevant opinions of the products, based on comments from previous buyers.

We also apply Natural Language Processing models – on which the operation of ChatGPT is based – to optimize Customer Experience processes. Thus, when users contact our support centers, the language models allow us to detect 80% of who is the most appropriate person or team to solve the problem. Other key areas will be automation and robotics. These technologies make it possible to improve the efficiency and productivity of logistics operations, which translates into a better experience for customers.

-What e-commerce challenges and opportunities have you identified in the region?

I think that a great challenge that the e-commerce industry has, in general, has to do with sustainability. With how we grow the business without overlooking the environment and our carbon footprint. It's a big challenge. In that sense, we have an electric fleet in Brazil, Chile, Colombia and Mexico. They are last mile vans, which reduce CO2 emissions versus those of traditional combustion (oil, gas, gasoline).

-Logistics is also key to the operation of Mercado Libre.

Yes, we are constantly working on expanding the fleet and charging infrastructure, in partnership with the main market players, to accelerate the logistics development process in the region. We also have projects to migrate our storage centers to renewable energy and to begin to increasingly promote the use of low-emission fuels or renewable sources in our truck fleet. We have strengthened our logistics arm and have developed 100% proprietary technology in almost all markets, which speeds up the distribution process.

In addition, the systems to manage, store, choose the best carrier, build the best promise, are typical of Mercado Libre. On each one we try to mount artificial intelligence and machine learning technology to optimize the use of physical resources and the experience to the maximum. We have the vision of deepening the penetration of our entire ecosystem, giving more tools to our sellers, with tools such as working capital credits, for example, and to buyers, with consumer credits or savings tools.