By Aluisio Alves
SAO PAULO (Reuters) – Mercado Livre achieved strong results in the fourth quarter, despite continuing to slow down, as the largest e-commerce portal in Latin America maintained its efforts to engage the tens of millions of users conquered during the pandemic and in obtain extra sources of revenue for the gradual profitability of the business.
The company announced on Tuesday that its fourth quarter net revenue totaled $2.1 billion, up 60.5% from a year earlier. In local currencies, the expansion was 73.9%. In Brazil, which represents 53% of the company’s revenue, the advance was 56% in dollars and 62.4% in reais.
A year earlier, in the wake of the explosive growth of digital operations in Latin America due to social isolation measures, the revenue of the Argentine-based company had practically doubled in dollar terms.
The revenue slowdown reflected a more gradual growth in both new customers and sales. The active unique user base totaled 82.2 million at the end of 2021, 11.1% higher in 12 months, after having soared 74% in the previous year.
And sales volume (GMV) from October to December increased by 21.2% in dollars (32.2% in local currencies), reached 8 billion dollars, after a 70% jump a year earlier.
“Growing at this intensity on such a strong basis of comparison was very positive,” André Chaves, vice president of strategy, development and investor relations at Mercado Livre, told Reuters, noting that the company gained market share, based on internal metrics.
According to him, business growth remains a priority for the company, which should imply new investments in logistics in Brazil and in markets such as Mexico and Chile in 2022, as well as in the operation of new dedicated aircraft.
By segments, Mercado Livre should target supermarket sales, given the reading that the macroeconomic environment with high inflation and rising interest rates should lead consumers to focus spending on more basic items, to the detriment of products such as electronics. It is a trend that the main marketplaces in the country are already exploring, such as Americanas.
“And the trend is for consumers to look more for online shopping, where they can get better prices,” said Chaves.
Another focus of the group will be on the financial businesses, led by Mercado Pago, which registered a 52.1% advance in the volume of payments in the fourth quarter, to 24.2 billion dollars. In local currencies, the expansion was 72.8%.
In addition to expanding the offer of products such as insurance and credit – the volume of loans ended 2021 at 1.7 billion dollars, more than triple in a year – the company plans to offer more types of investments linked to cryptocurrencies, a segment in the country. which premiered in Brazil in December.
According to Chaves, even prioritizing the growth of the base, Mercado Livre is gradually evolving the levels of profitability of the business, such as the improvement of the Ebit margin.
From October to December, Mercado Livre lost US$46.1 million, compared to a loss of US$50.6 million a year earlier.
NEW CENTERS
The group revealed to Reuters the opening of four new distribution centers in Brazil, all in São Paulo throughout 2022. One, in the São Paulo neighborhood of Perus, has already started operating, while two in Barueri, in the metropolitan region; and another in Araçariguama (SP) will be opened in the coming months.
According to the company, the new centers will increase their daily logistics capacity by more than 1 million packages, doubling the potential for parcel deliveries in the country.
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