E-Commerce Booms in Latin America: Can MercadoLibre Win the Market?

MercadoLibre MELI is benefiting from increasing Internet adoption across Latin America, further solidifying its role as the go-to destination for online shopping in the region. The company continues to enhance its online buying experience through better pricing, navigation and product selection, helping it outperform in key markets. Strong brand preference across Brazil, Mexico, Argentina and Chile in the first quarter of 2025 highlights growing consumer trust in its marketplace and value proposition.

MercadoLibre sees a significant runway for growth. Physical stores still represent around 85% of retail spend in the region, while MELI holds less than 5% share. In the first quarter, unique active buyers grew 25% year over year, driving strong FX-neutral GMV growth of 30% in Brazil, 23% in Mexico and 126% in Argentina. The company aims to raise purchase frequency and category penetration, especially in areas like supermarkets, to capture more of this opportunity.

To support these goals, MELI is investing in user experience and infrastructure. Features like repeat purchase options and category-based navigation helped the supermarket category grow 65% year over year in the first quarter, outpacing all others. Logistics upgrades also played a key role. Fulfillment penetration in Brazil surpassed 60% in March, and rising scale is lowering per-order costs across regions, enabling strategic initiatives like free shipping.

These improvements are translating into strong financial results. In the first quarter, commerce revenues reached $3.3 billion, growing 32.3% year over year, and accounted for 55.6% of MercadoLibre’s total revenues. The Zacks Consensus Estimate for MELI’s second-quarter Commerce revenues is pegged at $3.7 billion. As MercadoLibre expands its footprint and enhances its platform, its ability to retain a dominant share of Latin America’s e-commerce market appears increasingly durable.

MELI Faces Stiff Competition in the E-Commerce Market

As Latin America’s e-commerce landscape heats up, MercadoLibre is facing intensifying competition from global giants like Amazon AMZN and Alibaba BABA.

Amazon is steadily expanding its regional operations, leveraging its advanced logistics network and strong brand to attract more consumers. At the same time, Alibaba’s AliExpress appeals to price-sensitive shoppers with ultra-cheap goods and an extensive product range.

These players are aggressively targeting MELI’s core markets, threatening to erode its pricing power, customer retention and long-term profitability. While MELI remains the regional leader, sustained pressure from Amazon and Alibaba could change the competitive dynamics in Latin American e-commerce.

MELI’s Share Price Performance, Valuation and Estimates

MELI shares have gained 43% in the year-to-date (YTD) period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 2% and 0.7%, respectively.

MELI’s YTD Price Performance

From a valuation standpoint, MELI stock is currently trading at a forward 12-month Price/Sales ratio of 3.96X compared with the industry’s 2.01X. MELI has a Value Score of D.

MELI Valuation

The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $12.01 per share, which has been revised upward by 2.65% over the past 30 days, indicating 14.60% year-over-year growth.

MercadoLibre, Inc. Price and Consensus

MercadoLibre, Inc. price-consensus-chart | MercadoLibre, Inc. Quote

The consensus mark for 2025 earnings is pegged at $47.75 per share, which has been revised downward by 0.35% over the past 30 days. The estimate indicates 26.69% year-over-year growth.

MercadoLibre currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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