About Osvaldo Gimenez
Osvaldo Gimenez, Chief Product Officer at Mercado Pago and Mercado Libre, has discussed the company's growth in Latin America, noting that both e-commerce and fintech have taken off in the region. He stated that 50% of the population lacks access to financial services and that e-commerce accounts for less than 5% of retail sales, but that the basic infrastructure is now in place. Gimenez emphasized the company's focus on driving digital payments and financing to close the gap with more developed markets, and acknowledged the margin pressure from offering free shipping to drive top-line growth.
Gimenez has also highlighted the company's technological investments, including deploying AI to improve code development and customer support, and launching a stablecoin called Melly Dollar for its loyalty program. He described the challenges of maintaining culture as the company grew to over 70,000 employees and of building compliance mechanisms as MercadoLibre became regulated in every country it operates in. Gimenez characterized failure as acceptable when trying new things, stating that "the only time you are not allowed to fail is the last time you try something."
Source: AI-verified profile updated from Osvaldo Gimenez's recent appearances.
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Transcript (9 segments)
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Osvaldo Gimenez0:10
America is very big, and both e-commerce and fintech have taken off in the region. 50% of our population does not have access to financial services. E-commerce is less than 5% of retail, but all of the basic pieces are now in place and working well. So the experience of buying something online and getting it delivered for free is working very well. The net promoter scores are high, so people are really embracing our platform much more.
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Interviewer0:40
Interesting. You just had a very big capital raise, $1.9 billion, including $750 million from PayPal. Tell us about the capital raise and the use of proceeds, and what the PayPal investment means for you.
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Osvaldo Gimenez0:52
Well, we've had a long-term relationship with PayPal for many years. They used to be part of eBay, who used to own 20% of us. And this investment is a good way to do that. We are doing best practice sharing, and we are looking at ways where we can integrate our platforms to benefit our users. And the capital raise is geared towards continuing to drive all the financial services that we digitally want to provide to users in Latin America: QR payments, credits, prepaid cards. Yeah, you know, basically building all the fund that provides returns to people who have funds on their wallet. So in Latin America, e-commerce is a percent of total retail sales, you know, four or five percent, below what it is in other regions. So that is one reason going back to why we were raising money: to drive digital payments and also grow our financing business that is growing very rapidly in Latin America. And the other one is shipping: quick, safe, and free shipping. Those two things drive e-commerce dramatically, and those are the areas that we are focusing on.
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Interviewer2:33
So for your company, it's almost like you ripped a page out of the Amazon playbook, which is free shipping, which has the result of driving top line sales and seeing an acceleration of your revenue growth. But there is a margin pressure there. Talk to us how you balance the top line growth versus the profit margin pressure.
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Osvaldo Gimenez2:47
Yeah, well, free shipping is costly, and as you correctly state, it drives a lot of growth. We've been a public company since 2007, and we've been profitable almost every year. Last year we had a couple of very large price increases from our main carrier in Brazil, Correios, and that affected our profitability. But obviously we want to balance growth with having a sustainable business.
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Interviewer3:28
Talk to us a little about logistics. That last mile logistics is difficult for everybody, getting that package to the door. Consumers want it almost as soon as they push the button. Talk to us about logistics investments you're making there and some of the challenges you might be facing.
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Osvaldo Gimenez3:42
Well, it's particularly challenging in Latin America because it's a geographically very, very large region with mountains, jungles, deserts, and many times small towns scattered around such a large geographic area. We're working on all these things.
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Interviewer4:10
Smart. Marcus, just real quick, last 20 seconds: talk to us about Brazil. What's the challenges there in Brazil? How's the Brazil market for you? That's such a big market in Latin America.
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Osvaldo Gimenez4:18
Yeah, Brazil had some issues last year because of the Correios issue we mentioned before. This year it's growing very nicely, and in general the economy in Brazil, I think, is poised to start growing faster than what it has grown in the past. So we are very optimistic about Brazil going forward.
