Mercado Libre CEO Marcos Galperin Steps Down, 38% Revenue Growth Reported

Mercado Libre, often referred to as the "Amazon of Latin America," has announced a significant leadership transition. Founder and CEO Marcos Galperin, who has been at the helm for 26 years, will step down from his role on January 1, 2024. He will be succeeded by Ariel Szarfsztejn, the current Chief Business Officer, who will take over as CEO while Galperin assumes the role of Executive Chairman.

Galperin, in a letter to employees, expressed his confidence in the new leadership, stating that Szarfsztejn and the team are well-equipped to continue the company's strong growth trajectory. Galperin will continue to be deeply involved in strategic decisions, product development, corporate culture, capital allocation, special projects, and the application of artificial intelligence to the business.

Szarfsztejn joined Mercado Libre in 2017 and has been instrumental in developing the company's logistics network across the region. Over the past three years, he has overseen the consumer market business. Prior to this, he held executive positions in the hotel industry and worked at The Boston Consulting Group and Goldman Sachs.

Galperin reflected on his journey with Mercado Libre, from writing the business plan during his university days to building a strong team and achieving significant milestones, including profitability, a NASDAQ listing, and the addition of millions of users. He highlighted the company's achievements in technology, logistics, and financial services, which have improved the lives of billions of people in the region.

Mercado Libre started as an online auction site where users traded second-hand items. It took six years for the company to achieve financial stability. Initially, it relied on major carriers in Latin America for a drop-shipping model. Today, the company operates over 25 distribution centers, hundreds of service centers, the largest electric vehicle fleet in Latin America, traditional fuel trucks, and six Boeing 737-800 cargo planes operated by Gol Linhas Aéreas Inteligentes.

Galperin believes that the timing for this leadership transition is right, given the company's strong financial and market position. In 2024, Mercado Libre reported a 38% year-over-year increase in net revenue, reaching 21 billion dollars, with an operating profit of 2.6 billion dollars and a profit margin of 12.7%. The company's Gross Merchandise Volume (GMV) reached 51.5 billion dollars, a 15% increase from the previous year.

Mercado Libre's market achieved a milestone with over 100 million independent buyers in 2024, a 24% increase from 2023. Continuous investments in user interface, product variety, and logistics have enhanced user engagement and shopping frequency. The company's extensive logistics infrastructure enables fast delivery services across the region.

Throughout the year, Mercado Libre opened 10 new distribution centers, investing 500 million dollars in logistics capital expenditures, and expanded its free shipping services. The company handled 1.8 billion items, with 49% delivered on the same or next day, a remarkable achievement given the region's developing infrastructure. Additionally, 70% of orders were delivered within 48 hours, demonstrating improved delivery efficiency.

In a March company podcast, Chief Financial Officer Martin de los Santos mentioned that Mercado Libre will continue investing at a similar pace, with plans to open multiple distribution centers in Brazil and additional warehouses in Mexico to keep up with the 30% year-over-year growth in GMV. The company's growth momentum continued into the first quarter, with sales increasing by 37% year-over-year to 5.9 billion dollars and operating profit growing by 45% to 763 million dollars.

E-commerce accounts for 15% of total retail sales in Latin America, compared to approximately 16% in the United States. Market forecasts predict that the Latin American e-commerce market will grow by 54% from 151 billion dollars in 2023 to 232 billion dollars by 2028. Mercado Libre executives noted that the company's share of the total retail market is less than 5%, indicating significant growth potential.