Mercado Libre's Growth and Challenges

Mercado Libre, the largest online marketplace in Latin America, reported robust revenue growth of 35% year-on-year, driven by increased consumer spending in Argentina. The company welcomed nearly 7 million new buyers, representing numbers higher than those during the pandemic's peak. However, concerns arose around the significant growth of its credit division and the associated margin erosion, as operating margins fell from 18% to approximately 10%. While the long-term vision for Mercado Pago aims to create value within its ecosystem, current market reactions suggest investors are wary of the potential impacts on profitability amidst aggressive credit expansion.