MercadoLibre Taps Into Pharma and Food With Regional Pilots

0:00As a top performing advisor, you demand top performing funds. That's why Fidelity's 1 ,000 experienced research professionals combine deep insights and advanced analytics to deliver consistent outcomes for clients across market cycles. Explore 300 plus Morningstar rated four and five star funds at i.fidelity.com slash top funds. Across all fund share classes of Fidelity, Fidelity Advisor Shares and Fidelity ETS as of 6-15-2026, past performance is no guarantee of future results. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand.

0:38But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated.

1:17What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person, how you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com. As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance. With our unified Team Michigan approach, businesses scale faster and compete at the highest level.

1:55Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg Audio Studios, podcasts, radio, news.

2:08Martin de los Santos:You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Mercado Libra is basically the Amazon of South America. The stock has more than doubled in the past five years, up 125 percent. And the CFO joins us right now out of Latin America, Martin de los Santos. And Martin, I've spoken to you a couple of times in the past few months. Give us an update on how your business is doing, how your growth is looking right now and how the economy feels to you. Hi, Matt. Thank you for having me. Pleasure being here. We announced results a couple of months ago for Q2, which shown a very strong growth, both on our e-commerce platform as well as our fintech business.

2:58A number of users growing very nicely at 30 % on fintech, 25 % year-on-year growth on commerce, performing very, very well in all of the markets where we operate. We continue to increase financial inclusion. But then when we look ahead, we see plenty of growth in the future, right? Penetration of e-commerce in Latin America continues to be relatively low compared to the U.S. or Asia. It's at mid-10%. Financial inclusion is very, very low. And we're also making significant progress on bringing people to our ecosystem. So we are very excited, not only with the results that we deliver in Q2, but more importantly, with the growth that we see ahead of us.

3:39Martin de los Santos:I will say normally. So, Martin, I know normally you're in Montevideo, but right now you're in San Francisco. just to correct myself. Yeah. Well, tell us a little bit, Martin, about why you are in San Francisco. We are attending the Goldman Sachs Technology Company conference, I'm sorry. So we're visiting with investors and analysts and again, talking about the results and the future of the company. And to that point, I mean, so this is a technology conference. How are investors globally thinking about the Latin American tech scene? What are some of the conversations that you're having on the ground there?

4:16Yeah, obviously, they're looking at growth, the opportunity that we have on FinTech, the new launches that we have done recently. On the FinTech side, we announced the launching of the new credit card in Argentina. We are doubling our credit book year on year in this quarter. We are doubling the number of the amount of the funds invested on our platform. On the commerce side, we are at record levels in terms of growth. We continue to increase market shares on all of the markets where we operate. We're increasing our free shipping offering. So a lot of new things happening on our ecosystem. And those are the type of things that we're discussing with investors.

4:53Martin de los Santos:Poonam Goyal, our Bloomberg Intelligence Analyst who watches your business, wants to know about the acquisition of Globo Brazilian Drugstore and how we should interpret that acquisition, what you're going to do with it, what's your strategy? Yeah, I think when you look at the pharma category, it's a category that is with very low penetration of e-commerce. But it's a large category within commerce in general with a lot of frequency of purchase. So we are experimenting not only in Brazil, but in each country where we operate. We have a small pilot on pharma. It's a complex segment of a market because it's highly regulated.

5:32But we think it generates a big opportunity going forward. So it's not a lot to report right now. We just acquire in Brazil a small pharmacy to start to experiment. It's a very small part of our business, but it has a big potential because of the size of the commerce that is done on pharma. Well, talk to us more broadly about how you're thinking about M &A right now. You made this purchase, of course, at the end of August. Should we expect to see more purchases from you? No, we historically have been, you know, we have performed very few acquisitions. For the most part, we like to build what we do, and we have done so.

6:11We have built our full fulfillment infrastructure on our own instead of acquiring. We have built our fintech solutions throughout the years on our own. We have 18 ,000 developers that are focusing on building the product at MercadoLibre and MercadoPago. So I would say that for the most part, we are not an acquisitive company.

6:29Martin de los Santos:What about the pharma side of the business? I mean, do you see a lot of growth there? It's something that Amazon has recently gone into here. How many of your customers are getting their drugs from you now or online now compared to what you expect in, say, five years? I think if you look at the pharmacy as percentage of sales at MercadoLibre is negligible. It's almost nonexistent today. So it's more of an opportunity going forward than a reality today. As I mentioned, we operate in 18 different countries. this country has a different regulation for pharma. So I think it's more of an opportunity than a reality today.

7:06But like pharma, there are many different bets that we're doing throughout the operation that, you know, supermarket, 1P, we're experimenting with food delivery that are small today, but represent large opportunities going forward.

7:20Martin de los Santos:By the way, Martin, can you watch what Amazon does? And, you know, do you have time to watch them, wait and see how it works out for them, and then do it yourself? Or do you like to make your own innovative moves, make moves at the same time? How does that work? I think, obviously, we observe when we analyze everything around the world, obviously the U.S., but a lot what's happening in China. And we try to bring those things to Latin America, but those require adaptation, right? I mean, in the early days, when we started MercadoLibre 25 years ago, we used to be very similar to eBay, but we rapidly realized that we needed to adjust the model and we move away from that, the auction model, for instance.

8:04Then we build our infrastructure in the same way as Amazon has in the US. Our fintech solution looks a lot more what the Chinese have in China because of financial inclusion that we needed to make. So I think we do observe a lot what's happening in the world, but then we need to customize it to Latin America, which has a different, very different environment. Well, it feels like Amazon is the elephant in every room just about. And on the topic of Amazon, they recently bought a stake in a Latin American delivery startup, Rappi, I believe it's pronounced. It's a Colombian delivery company. What does this potentially mean for you?

8:40What did you make of that news? I think we've been competing with Amazon for many years in Brazil and obviously more intensely in Mexico. And again, as I mentioned before, we have built our logistic infrastructure and our payment infrastructure to compete with Amazon, with the Asian players, and we will continue to compete with them based on the strength of our ecosystem. So again, it doesn't change the trajectory of our investments or our strategy. Yeah, not much to report on that front.

9:11Martin de los Santos:What's your investment strategy in terms of AI or data centers? Are you pouring, you know, like all of the mega cap tech companies over here, billions of dollars into that? No, we're not. I think we, regarding AI, I would break it down in three. There are certain initiatives that are helping us with cost savings. There are certain ones that are consumer facing and are helping us to push growth and improve the user experience and conversion. And there are certain ones that speak more about the, you know, agenting AI, the way we interact with our users. I would say that we're making a lot of progress in terms of cost savings in many different areas of the business, in particular in coding.

9:51You know, the 18 ,000 developers that we have are embracing AI and becoming more productive. Also consumer facing a lot of ways that the users interact with our platform are helping improving because of AI. And then on the agentic AI, we're, you know, experimenting a lot. I think on that front, we have more questions than answered yet, but we have a large team of people who are looking at ways we can improve the user experience via developing our organizations. All right. That's a good place to leave it. Martin, it's really great to get some time with you. That is Martin de Los Santos. He is the chief financial officer of MercadoLibre.

10:28This episode sponsored by Homebase. Homebase is built for small businesses trying to do it all. the neighborhood coffee shop, the local gym, the family-run restaurant. With Homebase, you can schedule your team, track time, run payroll, and manage hiring from one easy app, so you can spend less time chasing timesheets and more time running the business your customers love. More than 150 ,000 small businesses already use Homebase to keep their teams on track. Start free at joinhomebase.com. Homebase, built for small businesses that do it all. Get the news you need in just 15 minutes.

11:03Martin de los Santos:Start your day with Bloomberg Daybreak, the podcast with a global view on the stories that matter. I'm Nathan Hager. And I'm Karen Moscow. Join us each morning for curated stories on current events, politics, business and foreign relations. Plus one conversation on the day's biggest developments, all in just 15 minutes. Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter. Listen to Bloomberg Daybreak each morning on Apple, Spotify or anywhere you listen.