In this segment from Motley Fool Money, host Chris Hill chats with senior analysts Jason Moser, Matt Argersinger, and Ron Gross about Latin American e-commerce leader MercadoLibre (NASDAQ:MELI), which failed to hit its guidance targets for its fiscal first quarter. However, a large share of that miss can be attributed to a required change in the way it handles its accounting.

The Fools dig out better measures of its performance, and talk about the real risks and downsides in the business. They also consider the wider e-commerce segment, and speculate about the battle between JD.com (NASDAQ:JD) and Alibaba (NYSE:BABA) in China.

A full transcript follows the video.

This video was recorded on May 11, 2018.

Hill: Shares of Latin American e-commerce giant MercadoLibre fell 3% this week after first quarter results fell way below Wall Street's expectations. Matty, just from a headline perspective, the miss seemed much bigger than the drop in the stock.

Argersinger: Right. There's a little confusion, though, with the results from MercadoLibre this quarter. They adopted a new accounting standard. Their shipping costs or shipping subsidies for free shipping and things is now being rolled into net revenue. Before, it was in cost of goods sold. It really has no impact on the business in terms of gross profit, but it did hit the revenue number, which came in at 19% growth year over year, which is a far cry from the 30-50% revenue growth we've been seeing. Again, it's just an accounting change, but it certainly affected the headlines in terms of what people perceived of the quarter.

I would say, of the metrics I care about and what I think investors should care about, everything looks great. You have items sold, which is my rough proxy for normalized revenue growth, up 50% to 80 million items in the quarter. Gross merchandise volume up 34%. Unique buyers up 28%. Then, total payments transactions across Mercado Pago, which is their PayPal system, up 69% to 74 million.

The one thing I'd say I'm worried about, in spite of all these great results, is that Argentina is now in the news again. Hyperinflation, recession. Argentina is still a big chunk of MercadoLibre's revenue. That's something to watch in the coming quarters.

Moser: Matty and I were just wondering a little while ago if, perhaps, Amazon got into the middle of that Flipkart deal with Walmart (NYSE:WMT), keeping Walmart focused on Flipkart and maybe keeping their eye off of, perhaps, Latin America. What if, maybe, over the course of the next few weeks here, because now Walmart is committed, they have a big deal they have to get through, maybe Bezos jumps in there with MercadoLibre, and there's some kind of relationship or possible acquisition tied up there at some point.

Argersinger: It would be a nice concession prize to not getting Flipkart, for sure.

Hill: Where else should we be looking for the next battle royale when it comes to e-commerce? Last week on the show, we were talking about India and the battle for Flipkart. Obviously, Latin America is an important market. Is there anywhere else where you find yourself looking, or maybe trying to look into the crystal ball and see where Jeff Bezos and the folks at Walmart are looking?

Argersinger: Tough to say, but I would say, if we go to China, someplace where Jeff Bezos and Walmart really can't look, I think there's an interesting battle going on right now between Alibaba and JD.com. We talked about JD with their deal with iQiyi earlier. I feel like JD has the better model that's going to win in the end. JD is about an eighth the size of Alibaba. But, it's interesting to see these two companies go together, and the partnerships that JD is doing with iQiyi -- and with Walmart, by the way -- in China.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Hill owns shares of AMZN and PYPL. Jason Moser owns shares of PYPL. Matthew Argersinger owns shares of AMZN, IQ, JD.com, and MercadoLibre and has the following options: short July 2018 $42 puts on JD.com, long January 2020 $50 calls on JD.com, and short January 2020 $50 puts on JD.com. Ron Gross owns shares of AMZN. The Motley Fool owns shares of and recommends AMZN, JD.com, MercadoLibre, and PYPL. The Motley Fool recommends IQ. The Motley Fool has a disclosure policy.