MercadoLibre (MELI -1.90%) runs one of the largest e-commerce marketplaces in the world. It may not be a company U.S. consumers are familiar with, but its dominance in countries such as Argentina, Brazil, and Mexico has many people referring to it as the "Amazon of Latin America."

The company reported $41 billion in gross merchandise volume on its platform over the last 12 months, and it's achieved this impressive level of adoption, in part, due to its logistics network.

In the third quarter of 2023, MercadoLibre handled well over 200 million shipments, and of these shipments, more than half were delivered on the same day or the next day. Moreover, 80% of shipments were delivered in 48 hours or less. While this speed is somewhat commonplace in the U.S., this is a monumental achievement for Latin America.

And to build on its leadership and reach in the region, the company just launched its own version of Prime.

Amazon was able to grow its market penetration by launching its Prime membership service back in 2005. Now, the service is well-known for perks like free two-day shipping and access to Prime Video, among others, and it fueled the growth of Amazon's marketplace to world-class levels.

Here's what investors need to know about MercadoLibre's own take on a membership service, Meli+.

What is Meli+?

Meli+ is similar to Amazon Prime in many respects. Select items are eligible for free shipping if the total value of the order is above a certain threshold. Users also have to agree to receiving the shipment on certain days so the company can bundle orders together. Users who can't wait would have to pay for shipping.

The shipping perk alone should boost growth of MercadoLibre's e-commerce platform. The company had more than 50 million unique buyers in Q3, which leaves room for a lot of growth in its key markets. But sometimes people need a little more incentive to try something new, and free shipping with Meli+ could do the trick.

That said, it's possible to lose a lot of money in logistics and fulfillment. The company is trying to be more efficient by limiting the free shipping offer to specific delivery days, which should help profitability.

What else do members get?

Another similarity between Amazon Prime and Meli+ is the offer of streaming video content. However, there's a major difference between the two. Whereas Amazon produces some original content for its streaming service, Meli+ subscribers will get free access to Walt Disney's Disney+ and Star+ platforms.

In the near term, MercadoLibre's arrangement with Disney is extremely advantageous. As management for Amazon or Netflix will tell you, producing original video content requires significant investment. MercadoLibre will offer its members the perk of a streaming service without the expense or hassle of producing content.

To top off the benefits, Meli+ members will also enjoy a free year of access to streaming music through Deezer, discounts on other services like HBO Max and Paramount+, and exclusive offers on the company's marketplace.

What to watch in 2024

Going forward, investors should watch MercadoLibre's active user metrics to see if Meli+ is helping with adoption since its launch in Q3 2023. Moreover, the company's operating income has soared over the last few years. Ideally it can keep soaring as the business grows, but it's possible Meli+ eats into profits even as it drives adoption. That's something for investors to closely monitor as well.

Overall, MercadoLibre stock is a buy, and Meli+ has the potential to drive the next chapter of the company's long-term growth.