Largely impressed with Mercado Libre’s earnings. They are hyper-focused on long-term value. They are not sparing a single cent. My largest concern is the move to expand the loan durations. However, it looks like they are testing the waters with further credit card CAC. I wouldn’t trust any other management team to execute this strategy but I am confident in this one.

On to cross-border trade updates to add to my post below. They believe when it comes to CBT they have an unmatched competitive advantage for merchants in China AND the USA largely becasue they are the largest e-commerce platform in the world’s fastest-growing region by sales.

They are weaponizing their domestic fulfillment network for top Chinese sellers to migrate into local networks, which further improves conversion rates with faster delivery times.

The Chinese supply-base opens a whole new TAM for MELI because of their low ASP’s, fast innovation cycles and depth in offerings. This complements the core local marketplace and they see a path towards profitability.

They highlighted how last year was huge transformation because they removed several friction points that were limiting growth in their International dropshipping model: free-shipping, multiple-seller shopping carts and more incentives for sellers. They saw 68% FXN GMV growth YoY in Q1. Mexico as I mentioned was thriving as their strongest CBT market but its spreading where Argentina and the Andean countries showing a material impact.

This will be a big growth negine in Peru and Colombia where GDP per capita is lower and local seller-base is not as deep. CBT makes direct contributions to buyer assortment, which management highlighted as the most critical drivers of e-commerce development