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Here's What Should Have MercadoLibre Investors Most Excited

By Danny Vena - Jan 11, 2021 at 9:00AM

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The company is already the leader in Latin American e-commerce and digital payments, but this is just the beginning.

The last couple of years have been a thrill ride for MercadoLibre ( MELI 5.62% ) investors. Online retail has surged, payments have moved off-platform, and the stock has tripled over the past year alone. Yet as far as the company has come, there are still untapped sources of growth. 

On this episode of Fool Live that aired on Nov. 23, Motley Fool co-founder David Gardner and contributor Danny Vena were joined by Federico Sandler, MercadoLibre's head of investor relations, who shared two areas for potential growth that have the company most excited.

Danny Vena: "What areas of MercadoLibre's business are you most excited about?" Is there a particular area of the business that gets you really excited for the future?

Federico Sandler: Yeah. I'll break it down a little bit. I think on the commerce piece, what we're excited about is the immersion into faster frequency categories, which are completely enabled by our logistics network.

Selling toothbrushes, toilet paper, and cheap CPG [consumer packaged goods] items without a distribution center, you can never be able to do it because the economics doesn't make sense. You can't send a toothbrush from one direction and toilet paper from another. So as we centralize inventory, we can move into faster frequency categories and gaining that purchase frequency that we aspire to have relative to the global players, so logistics category expansion.

Then on the fintech piece, I think what excites us the most is what we can do democratizing money. I think we have all the correct ingredients, the technology stack, the distribution, the demand for the services, so we're very excited to digitally include many people who have been left out for many years.

I haven't given this example here, I've been boxing as a hobby for many years, and when I met my latest coach, he lived entirely in cash, completely informal, never invested money, never actually was able to do electronic payments. Fast forward a few years, two or three years, and he has a mobile wallet, he's collecting with QR, he's investing his money with Mercado Fondo, he has a prepaid debit card. That is the type of things that excites us, because there the opportunity is still so large, about 50% of 600 million people are unbanked or under-banked.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Mercadolibre, Inc. Stock Quote
Mercadolibre, Inc.
$1,112.14 (5.62%) $59.19

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