Company Background
MercadoLibre (NASDAQ:MELI) is currently the largest e-commerce player in Latin America, some people call the company the "Amazon (AMZN) of Latin America" because of the similarities of what the two companies offer. However, MercadoLibre currently trades at only around 2% of Amazon's market cap. This article intends to drill into MELI's strategy, products, financials, competition, addressable market, and moat, in hopes of determining the potential upside of this stock. Of course, risk factors will also be discussed.
MercadoLibre is not a hot tech startup anymore. The company has been around since 1999, when Marcos Galperin, an Argentine, founded the company while he was still a graduate student at Stanford Graduate School of Business. Galperin, still the CEO today, had a vision back then, which is to create an eBay-like (EBAY) platform in his home country that would allow Latin Americans living in the rural areas to buy and sell goods more easily. His idea and vision brought many investors, and today MercadoLibre has a presence in 18 countries and is the market leader for about all of them, including Argentina, Brazil, Colombia, Chile, Mexico, Venezuela, and Peru.
The success of MercadoLibre (upped 800% since 2007 IPO) made Marcos Galperin the first tech billionaire of Argentina. At 46 years old today, he is just as energetic, driven, and hungry for success as he was back in 1999 because he knows the company, as well as e-commerce in Latin America, is still in its infancy.
About Latin America
With more than 20 countries, a total population of roughly 640 million people, and a rise in middle class, there is no doubt that LATAM is the region with the highest e-commerce growth potential in the next decade. The potential growth from LATAM would likely top those from North America, Europe, or Asia Pacific.
