Argentina’s Biggest Company Shrugs Off Amazon to Focus on Brick and Mortar
(Bloomberg) -- MercadoLibre is looking to brick and mortar as it remains confident it can take on Amazon.
Argentina’s largest company and one of Latin America’s biggest e-commerce retailers says it feels confident it can handle rivals with its almost two decades of experience working in 13 countries, said Marcos Galperin, chief executive officer of MercadoLibre, in an interview with Bloomberg Television. MercadoLibre Inc. aims to consolidate its position and build consumer loyalty as Amazon.com Inc. prepares an expansion in Brazil that has spooked investors.
"Our way of competing successfully is to look at all the players, see what they have that we think is great, and if we can incorporate that into our model, we will, but mostly play our game," Galperin said while speaking from Allen & Co.’s Sun Valley conference, and musing about this year’s global soccer championship. "As you know, we’re looking at the World Cup -- we try to play our game and use our advantages and our strengths. We have a great network of sellers, a great brand, we’re investing very heavily, we already have scale."
Shares of MercadoLibre gained as much as 2.2 percent in New York, the most intraday in almost a week.
It’s also betting on brick and mortar investments to improve service. Earlier this year, MercadoLibre announced a partnership for a 38,000-square meter distribution center in the greater Buenos Aires area. In addition, the company, which is providing loans to merchants and payment processing platforms, is working on a digital wallet that offers returns on whatever money is left, Galperin said. Infrastructure -- notoriously poor in Latin America -- is also a priority.
"We’re very very focused on building our logistics and fulfillment infrastructure," he said. "In the next few years, that’s where we’ll be investing."
MercadoLibre, which posted first-quarter revenue of $321 million, has the largest gross margins when compared to bigger rivals Amazon and B2W Cia, according to data compiled by Bloomberg. The company expects advertising to grow as merchants look to boost sales within the platform, he added.
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