When it comes to e-commerce in South America, MercadoLibre (MELI -2.91%) has built up a sizable competitive advantage and profits too. In this clip from "Ask Us Anything" on Motley Fool Live, recorded on June 29, Fool.com contributor Jon Quast outlines what the company is doing to spur its amazing growth.

Jon Quast: I'd say MercadoLibre is kind of in the middle. It's still investing for growth, but there are some profits. But it's not optimized for profits yet, so it's in this mid-phase of its business cycle, in my opinion.

When it comes to MercadoLibre, I will show this since it's not really optimized for profit yet, we're going to look at the price-to-sales ratio and we're going to look at revenue, quarterly, year-over-year growth, and original, there we go.

So, 63% quarterly year-over-year revenue growth. That is a really good growth rate. It's down a little bit. As you can see, it was over a 100% growing triple digits, 63% revenue growth that is still outstanding, and at a price-to-sales ratio of four, that's actually a pretty decent valuation for a company growing at that speed.

If we continue zooming out with MercadoLibre, we see it is actually growing at one of its fastest paces ever and trading at its cheapest price-to-sales valuation ever. That is really interesting to me. As far as the company goes, I believe it really does have competitive advantages and it is because of those investments that it has made in its shipping and logistics network.

I can pull it up if you want right now, if we have time, it might take me a couple of minutes to find it though. In the interest of time, I'll just say their shipping volume, they can get something in the magnitude of 80%-90% of products purchased through their platform they can deliver next day, 80%-90% somewhere in there.

That is something that nobody else in South America, to my knowledge, can offer. That's a real competitive advantage. If you want stuff fast you are going to MercadoLibre, and they are able to do that in a way that other companies can if they're willing to spend tens, hundreds of millions of dollars to build up the infrastructure that MercadoLibre has.

They can catch up if they're willing to spend that. Who has the money to spend that in that market? MercadoLibre does have a head start there, it's a moat, in my opinion.