Mercado Libre

Mercado Libre has built the leading e-commerce platform and associated FinTech business in Latin America, a region which remains a significantly under-penetrated market for its core offerings despite being a faster growing region with favourable demographics.

The company aims to democratise commerce and financial services by deploying technology to level the playing field between large companies, small businesses and entrepreneurial individuals.
Mercado Libre provides buyers and sellers with a safe online trading environment that fosters the development of a large e-commerce community in Latin America, a region with a population of over 650 million people and with some of the fastest-growing internet penetration and e-commerce growth rates in the world.

Since it listed in 2007, the company’s sales growth has been exceptional and is reflected in very strong shareholder value creation. Owning shares in this high-quality company gives us excellent exposure to the emerging market of South America.

Mercado Libre’s online marketplace facilitates the sale of various goods which the platform does not directly produce. A proportion of sales includes products from categories listed in our exclusionary screen policy such as alcohol and tobacco. These sales make up a minor portion of the company’s revenue, falling below the 10% threshold outlined in our screening policy, however we continue to monitor this portion of their overall sales.

The company operates in some countries where labour rights are often weaker and can raise questions around fair wages, working conditions and respect for workers throughout their operations and supply chain.

The e-commerce industry requires significant energy to power data centres, consuming large amounts of electricity and water. e-Commerce presents its own efficiencies too, however we are aware of these environmental challenges. 

Additionally, Mercado Libre manages substantial volumes of personally identifiable and financial data. Data privacy and cybersecurity are therefore key risks, as breaches could lead to loss of customer trust, regulatory penalties, intellectual property theft, and other risks.