MercadoLibre Latin America's Ebay

Throughout Mexico, the country has traditionally, going back to its pre-Hispanic and/or colonial roots, had many types of marketplaces: the bazaar-like tianguis/market days; the indoor mercados municipales/municipal markets; and the open-air markets found in virtually every city. Now, well into the 21st century, Mexico and most of Latin America has access to the online marketplace. That is, in large part, thanks to an Argentinian-based company, MercadoLibre.

Mercado Libre (meaning “free market”) was founded in 1999 by its CEO, Marcos Galperin, while he was an MBA student at Stanford University. Presently, after its competitors either went out of business or by absorbing its other main regional online competition, such as DeRemate, Mercado Libre is a virtual monopoly and, consequently, is Latin America’s #1 e-commerce site. While its operations in Argentina and Brazil dominate the majority of its business, the company also has separate sites in Mexico, Chile, Colombia, Costa Rica, the Domincan Republic, Ecuador, Panama, Peru, Uruguay, Venezuela, and Portugal (due to its relationship with Brazil). It is often referred to as “Latin America’s Ebay.” In fact, due to MercadoLibre’s initial success as it had the vision, unlike its competitors, to successfully concentrate on the “product” rather than the “market,” MercadoLibre is Ebay’s exclusive Latin American partner and Ebay has an 18½% share in the company.

When MercadoLibre began its operations in 1999, the Internet penetration in Latin American homes was a mere 3%, while today it is almost 35% and growing more rapidly than any other region in the world. Within Latin America, which has a population of approximately 575 million people, over 200 million people are on the Internet, and more than 40 million people use MercadoLibre. In a region where unemployment and underemployment is very high, tens of thousands of people are now making all or most of their living by selling on MercadoLibre. It is also providing consumers in both rural and urban areas with access to goods that they may not have access to otherwise (including myself on one occasion).

Starting out more as an auction site, it has evolved and presently (more like Amazon.com) 90% of its items are fixed price. Moreover, about 80% of the merchandise is new and not (euphemistically in any language, I guess!) seminueva/semi-new. It also has an open payments platform, MercadoPago, which is similar to Ebay’s PayPal and other payment options may include cash, check, major credit cards, debit cards, and bank transfers (depending on the vendors preferences). The rating/feedback systems are similar to Ebay's also. Realizing that in Latin America that there are differences in the ways buyers and sellers interact, MercadoLibre decided not to utilize the option “Buy it Now” and to have a Question and Answer Board that everyone can simultaneously view rather than the vendor answering directly to the potential buyer. Computers, electronics, cars/motorcycles/other vehicles, sports/video games, and musical instruments are the leading categories.

Up until about nine months ago, I did not know that MercadoLibre even existed. However, I really wanted (ok, obsessively “needed!”) to obtain a digital camera with a zoom lens for nature photography and none of the stores in my area had anything close to what I was looking for and forget about having anything shipped to Mexico as there is a good chance that it will never arrive at its destination! Moreover, I did not want to wait the six months for when my wife was going to visit family in Texas to purchase it while there. So, I did some research and discovered MercadoLibre Mexico.

Overall, my only experience with MercadoLibre was positive. They had the exact item that I was obsessing about and also had others that I was considering. Even though I was not happy with paying about 20% more than what I would pay in the US online (pretty much in line for items imported into Mexico), the vendor’s communication with me was excellent and shipped out the item the day after she had obtained confirmation regarding my bank transfer. When received, the item was exactly as advertised. The only glitch was that, despite a state-of-the-art online tracking system, the near monopoly delivery service inexplicably and unexplainedly failed to deliver the item as scheduled and not wanting to wait one week more as they only deliver to my town on Mondays, I went to their office in La Piedad, about 20 miles away, the next day to get it.

Although I much rather do my shopping at the appealing-to-all-of-the-senses tianguis, municipal markets, and open-air markets, I do appreciate the service that MercadoLibre Mexico provided in my “time of need” and the options that it provides for the consumers of the region and the economic opportunities that it provides for the vendors. As for many of the vendors promoting and highlighting the availability of purchasing by credit card (for an additional 20% or so as in an item costing 6000 pesos can be purchased on credit for 600 pesos x 12 monthly payments) that is something that I am not thrilled with. Not at all!