The onset of the pandemic spurred adoption of both e-commerce and digital payments. Growth that was expected to take years materialized in a matter of months. Companies positioned to handle the surge in new digital customers have been rewarded with an expanding bottom line.
On this episode of Fool Live that aired on Nov. 23, Motley Fool co-founder David Gardner and Fool.com contributor Danny Vena were joined by Federico Sandler, MercadoLibre's ( MELI 2.73% ) head of investor relations. They discussed the changes to the competitive landscape wrought by the pandemic and why things will never be the same.
Danny Vena: Federico, you talked a little bit about the acceleration of e-commerce and the acceleration of digital payments as a result of the pandemic. As a result of that, since the beginning of 2020, what do you see as changes to the competitive landscape as a result of the coronavirus?
Federico Sandler: Let me break that down into two, note payments and commerce.
I think on the commerce piece, I think it's lifted all the e-commerce boats. It added a significant amount of users and growth, like I said, that we were expecting in years in a matter of months for all players. Then I think it's also for us, allow us to grow in scale. That has enabled us to continue to invest aggressively, maintain a leadership position, but also have a healthier bottom line as you have seen over the past few quarters. We've started to deliver positive EBIT [earnings before interest and taxes].
Then also what's enabled a lot of the growth around e-commerce is also the execution around logistics, which we'll probably talk further down the line. But I think the pandemic caught us at a very good point, and that's why we've been able to execute very well. I think that players that had a good value prop, an easy way to onboard, and good logistics have been very well benefited. The likes of Magazine Luiza, or B2W, or even Amazon ( AMZN -0.00% ) in Mexico doing very, very well. I would say, all the digital players have benefited from the pandemic and they continue to do so at the expense a bit of physical retail, which if we looked at it on a regional standpoint, even when we look at foot traffic, it's not entirely where it was pre-COVID.
Then on the payments piece. I think what's happened is, I think already on physical retailers and merchants that are looking increasingly for online channels. I think there what's happened is, the way that we were growing our payments business was in part with feet in the ground and more proactive commercial initiatives. What really happened after the pandemic is the demand reversed, and we couldn't have actually salesforces because of the lockdowns. It was more of a demand driven business. It's been incredibly robust, particularly on the segments on online payments. Our merchant either selling through our website or either sending a payments link to [Facebook's ( FB 2.40% )] WhatsApp so that they can actually do the payment online or through a mobile phone.
That's benefited also digital players like us and PagSeguro ( PAGS 2.96% ) and StoneCo ( STNE 4.76% ). Another thing fintech businesses who have benefited significantly from the shift to digital and the decrease of usage of cash now. I think that the pandemic has accelerated that.