Why MercadoLibre keeps soaring as other e-emporiums sink
IN MARCH AMAZON announced it would fire 9,000 workers—bringing to 27,000 the total number it has laid off this year. The e-commerce giant’s share price is down by a third since 2021. Other online-shopping darlings, from Shopify in Canada to Coupang in South Korea and Grab in South-East Asia, have suffered a similar fate (see chart). With one exception. At $64bn, the market value of MercadoLibre, an Argentine firm listed in New York with operations across Latin America, has been rising lately and is back roughly to where it was at the start of 2022—and twice that before covid-19. In April, as the world’s tech firms were sacking workers en masse, it said it would hire 13,000, mainly in Brazil and Mexico, raising its workforce by a third.
The region’s brick-and-mortar retailers, which are rapidly improving their own digital offerings, and online giants such as Amazon have cottoned on to this trend. To keep growing, MercadoLibre may need to boost penetration in less online countries such as Colombia, where Amazon is weaker, and perhaps move into new segments, such as groceries. But it does at least enjoy another advantage over foreign rivals, for which Latin America is a peripheral market—focus. Failure in its home region is simply not an option, says Agustin Gutierrez of McKinsey, a consultancy. Nothing concentrates the mind like survival. ■
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2023-05-04 08:07:10
Article from www.economist.com
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