MercadoLibre: The Next Chapter
Lawrence Burns
- MercadoLibre’s local expertise drives market share gains and its ongoing ecommerce expansion
- Its financial arm, MercadoPago, opens financial access to millions of new users joining the digital economy in Latin America
- Advertising is set to become a major growth area for the company, leveraging its unique consumer insights
As with any investment, your capital is at risk.
At the Scottish Mortgage Change Drives Growth digital conference, Lawrence Burns, deputy manager of Scottish Mortgage, welcomed Ariel Szarfsztejn, president of commerce and incoming CEO of MercadoLibre, Latin America’s most valuable company.
Szarfsztejn described MercadoLibre as “a tech and product company that is here to change the lives of Latin Americans, particularly through commerce and financial services.”
A Unique Moment
Burns opened by highlighting MercadoLibre’s extraordinary trajectory: “It must be a huge honour and privilege to lead what is not just the most valuable company in Latin America but also one of the fastest growing, with revenues still compounding at 30-40 per cent at incredible scale.”
Szarfsztejn agreed, describing his appointment as “a privilege… We are in the best moment of our 26 years of life, growing at startup rates while generating value, gaining market share across every single market in ecommerce, and growing triple digits in fintech… We are doing amazingly well, but the opportunity forward is huge.”
Embedded in Everyday Life
Burns asked Szarfsztejn to explain how MercadoLibre fits into daily life for millions of Latin Americans, to which he painted a vivid picture of the company’s ecosystem.
“People will send 30 per cent of their salary to MercadoPago, our fintech account, and that’s because we are remunerating deposits, which banks are not. They would pay for their bills, use our QR codes to pay for lunch, surf our ecommerce app, buy something for their partner, which would be delivered that same day… They could get their first credit line with MercadoPago, and go home to watch streaming content on MercadoPlay.”
This seamless integration of commerce, payments and entertainment exemplifies MercadoLibre’s ambition to democratise access and improve the quality of life for millions across Latin America.
Yet, as Szarfsztejn made clear, the company is only just beginning to tap into the region’s full potential: “It’s not only about ecommerce penetrating retail, it’s also us penetrating into the population of Latin America.”
Building Scale from Local Advantage
Reflecting on his personal journey since joining MercadoLibre in 2017, Szarfsztejn explained, “One of the first things that I realised after I joined was that from a strategic perspective, we needed to develop our logistics arm… and build our own wallet.”
The transformation he led is best illustrated by the growth in logistics, from a team of 60 to over 77,000 employees, underpinning MercadoLibre’s ongoing ability to deliver at scale.
Burns compared MercadoLibre’s success in Brazil with Amazon’s. Four years ago, Amazon had an 8 per cent share, which has grown to 11 per cent; but over the same period, MercadoLibre has gone from a 20 per cent to a 42 per cent market share.
Despite this impressive progress, Szarfsztejn stressed that ecommerce penetration in Latin America remains far below that of markets like the UK, meaning there is still enormous room for growth.
He credited the company’s success to local expertise – “We are 100 per cent in Latin America” – which results in a deep knowledge of each country’s different cultures, regulations and ways of operating.
“We very much know how to deal with that, how to deal with volatility, how to deal with uncertainty,” Szarfsztejn said.
Expanding Horizons: Fintech and Advertising
The conversation turned to MercadoLibre’s fintech arm, MercadoPago, which has disrupted the region’s banking system. “If you go back a few years, you would basically leave your money in a bank in Latin America and they would give you zero interest,” Szarfsztejn explained.
He explained, “We said, why don’t we give away our float and pay our users 100 per cent of the benchmark rate or even more in every single country. With that, we generate a big disruption in the traditional system.”
It’s paid off. Today, MercadoPago has 18 million people receiving interest daily, and 35 million users accessing credit lines, many for the first time. He noted, “We are convinced that the opportunity to generate financial inclusion that we have at hand is amazingly big. And we are very much committed to making that happen.”
But the company’s ambitions don’t stop there. Burns asked about the potential for advertising to become a third pillar alongside retail and financial services.
Szarfsztejn was optimistic: “We are, after Google and Meta, the biggest digital advertising player in Latin America. The interesting thing is that it’s still super small… We really think that the unique access to consumer data across Latin America gives us an edge… to become a huge advertising platform.”
With ecommerce, fintech, and advertising all at relatively early stages of development in the region, MercadoLibre is positioned for significant further expansion.
The Big Opportunity
As Szarfsztejn steps into the CEO role, MercadoLibre’s future is defined not just by its remarkable achievements but by the vast opportunities that remain untapped.
With ecommerce penetration in Latin America still far below that of more mature markets, and millions yet to access digital financial services or targeted advertising, the company is poised for continued expansion. As Szarfsztejn put it, “We are doing amazingly well, but the opportunity forward is huge.”
Watch the full recording to find out more about MercadoLibre.
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About the author - Lawrence Burns
Lawrence is the Deputy Manager of Scottish Mortgage, a position he was appointed to in 2021. He joined Baillie Gifford in 2009 and became a Partner in 2020. Lawrence is also a manager of Vanguard’s International Growth Fund and co-manager of the International Concentrated Growth and Global Outliers strategies. He has been a member of the International Growth Portfolio Construction Group since October 2012. Prior to these roles, he worked in both the Emerging Markets and UK Equity teams. Lawrence graduated with a BA in Geography from the University of Cambridge in 2009.
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