MercadoLibre (NASDAQ: MELI) sets fresh sales records, signaling an economic recovery in its home market
MercadoLibre (NASDAQ: MELI)—Latin America’s most popular e-commerce site—is getting a boost from its home market of Argentina and reporting fresh sales records. It’s a surprising trend that comes amid a historic and controversial austerity program being spearheaded by President Javier Milei and could be a leading indicator that brighter days may finally be around the corner.
“We’re seeing strong growth in consumption in Argentina,” MercadoLibre CEO Marcos Galperin said in a post on X last week, adding that a record 20 million products were sold on the platform in the country during August. “The growth rate accelerated even more in September.” In a separate blog post, MercadoLibre said that demand in the country had been rising in a “sustained manner” since May, both in terms of the number of products sold and total value in US dollar terms.
The numbers—which show increases in both people buying on the site and small businesses offering products—contain numerous signs of the economic transformation underway. While Milei has had no problem slashing spending—his government just reported the ninth-consecutive month with a fiscal surplus—his real challenge has been to create economic expansion and attract investment amid all the cuts and reports of rising poverty. He’s implored Argentines to be patient as he works to remake an economy plagued for decades with high inflation and a heavy state hand. The new data from the online platform suggests all the sacrifice may be starting to pay off, even though GDP shrank 1.7% in the second quarter.
MercadoLibre said that moves to eliminate rent controls had “dynamized” the housing sector, with the number of available properties listed on its platform tripling from last year. Mattresses, TVs and construction materials were all listed among the fastest growing product categories in a sign of the boom in activity. The number of people looking to buy a vehicle, meanwhile, rose 10% in September from the same month a year earlier.
“These indicators suggest a quantitative and qualitative recovery in the consumption patterns of Argentines,” MercadoLibre wrote. Its fintech arm, MercadoPago, is seeing strong gains in the number of customers using credit and financing plans, the company added. Inflation in September fell to the lowest level since November 2021.
Even with promising signals from its home market, MercadoLibre’s stock has dipped 1.8% over the past month amid ongoing political and economic uncertainty in Brazil and Mexico, with two broad ETFs that track those countries—iShares MSCI Brazil (NYSE: EWZ) and iShares MSCI Mexico (NYSE: EWW)—declining 5.5% and 2%, respectively. The Global X MSCI Argentina ETF (NYSE: ARGT) rose 3% over the same period, suggesting a clear breakout from its regional neighbors.
Argentina appears to be slowly emerging from a rock bottom hit earlier this year, with inflation on a clear downward trend and signs that the broader economy may be turning a corner. With MercadoLibre set to report third-quarter results next month, all eyes will be on whether its home-country momentum can help offset the tides still dragging on Brazil and Mexico.
