What are the factors behind the triple digit growth numbers that Mercado Libre is seeing in the market?
They are the external drivers, like people searching for PPE, masks, antibacterial gels, gloves, and so on; hence, there was a spike from March 2020 onward after phase one of the COVID-19 emergency in Mexico. We have a base of 2 million sellers just in Mexico and more than 11 million in the region, with sellers adjusting quite quickly to demand. Therefore, our recent growth was due more to the pandemic. A more long-term factor of our growth is our strategy of focusing on logistics and fulfillment solutions. We have warehouses in Brazil, Mexico, and Argentina. In Mexico, we have 130,000sqm of warehouses. Our footprint allows us to have thousands of sellers who can store their products, while Mercado Libre handles everything from storage to shipment. That is a service that enables thousands of SMEs and large companies to operate professionally in e-commerce without having to invest in their own warehouses or logistics systems.
How many visits have you registered in Mexico, and how are you expanding into other e-solutions?
Our app and platform receive more than 10 million visits daily. There are more than 6,000 searches made every second on the platform, with 13 products sold every second. As we know our customers' interests, what they look at, what they buy, and where they live, we can use this information to run personalized ad campaigns and increase the relevance of the searched content, which is what our ad sales solution Mercado Publicidad does. We have a fintech solution with Mercadopago, which is an online payment processor that companies can use for their own e-commerce. We also offer an account that allows people to pay for services like gas, electricity, phone bills, and even send money. Recently, we have the created an asset management solution with Grupo Bursátil Mexicano, whereby the balance in your digital wallet generates revenue through an investment fund. In 2019, we launched credit solutions, with more than 2 million credit lines to consumers currently. In Mexico, there are more than 54 million adults outside the formal financial sector. The democratization of money will come through the mobile phone, because everyone has a smartphone. Thus, all our solutions are available through a smartphone.
How sustainable are the levels of Mercado Libre's recent growth, and what strategies is the company using to maintain them?
In the past 10 weeks, Mercado Libre acquired more than five million new customers in the region. In Mexico, that number is over 1 million, and we grew orders by 112%. The best strategy is to give those customers a positive experience in all steps of the process so they will return. We see a steep increase in purchasing frequency among all customer segments, so out of our most loyal customers, more than 70% purchased again within the past 10 weeks. Looking at low frequency buyers who previously bought once a year, they now buy that same volume of purchases in less than a month. So, purchasing frequency is increasing across all customer segments. Of course, part of the growth is driven by the lockdown, with stores closing and people remaining at home. Total e-commerce to retail penetration in Mexico is around 4.9%, while in the US and Europe, it is more like 15%. As our base is still low, the present is simply an acceleration of the natural transition already taking place, which will cause a high convergence for customers who will expect digitalization from retailers. Certainly, people will continue to go to malls and shop because they want to entertain themselves and their families on the weekend. However, maybe they will realize it is more convenient to order products online during the week.