What is Mercado Libre? An overview of Latin America’s biggest online marketplace

Often referred to as the Amazon of Latin America, Mercado Libre is a platform for millions to shop and sell online. The marketplace name literally translates to Free Market, reflecting the wide range of products available, from groceries to houses.

This article will give you a general overview of Mercado Libre, how it works, and how it compares to similar platforms.

What is Mercado Libre?

Mercado Libre is a leading platform for buying and selling in Latin America. It covers 18 countries, including major markets like Argentina, Brazil, Mexico, and Chile.

Founded in 1999 by Marcos Galperin, a Stanford Graduate School of Business alumnus, the start-up aimed to create an online selling site for Latin Americans.

Over the years, Mercado Libre has grown into the region’s largest eCommerce platform, expanding beyond the marketplace to offer payment solutions, logistics, financing, advertising, and software services.

By 2023, Mercado Libre had reached 218 million active users, solidifying its dominance in the Latin American market despite competition from Amazon.

Key features of Mercado Libre

Mercado Libre has integrated services catering to the Latin American market, including:

Online marketplace

Individuals and businesses can sell new or used items in Mercado Libre. The platform lets sellers offer a wide variety of products and services, ranging from everyday products like clothes to high-value items like houses and cars.

One-stop hub for your needs

Mercado Libre is a convenient hub that offers multiple related services. For instance, you can include additional moving service and decoration items if you want to buy a house.

Protected Purchase Program

This program ensures protection by offering refunds for items that fail to meet expectations or are not delivered as promised. However, it is available exclusively to buyers who use Mercado Pago as their payment method.

Mercado Pago

A digital payment system that acts as an escrow service, ensuring that sellers receive payment only after the buyers confirm that the product has been delivered.

Mercado Envios

An integrated shipping service within the marketplace that includes fulfillment and tracking with reduced costs.

Mercado Ads

Mercado Ads is a paid service that helps sellers boost the visibility of their products or services on Mercado Libre. It offers a variety of ad formats, including search ads and display banners, making it a versatile tool for businesses of all sizes.

Mobile App

User-friendly apps for Android and iOS that let users browse, shop, and track orders on the go.

Mercado Play

Mercado Play is a video streaming feature that lets users access a curated library of movies, TV shows, and other digital content. It is often offered as an additional benefit for frequent shoppers or Mercado Libre loyalty program members.

How does Mercado Libre work?

Mercado Libre is an intermediary between buyers and sellers, allowing individuals and businesses to list various products.

You have to create an account to start buying or selling online in Mercado Libre. To do so, go to the Mercado Libre’s site and choose the country where you reside.

You’ll then enter the home page, which displays multiple products. Find the Create your account option on the navigation menu, and follow the required registration steps.

How to buy from Mercado Libre

Once you have an account, buying on Mercado Libre is simple:

1. Find the product you want by entering the keyword in the search bar. 
2. As a precaution, check the seller’s ratings and reviews. On their profile, you’ll see a color bar summarizing their past ratings, with green indicating a trustworthy seller.
3. Click the Buy now button.
4. Enter your shipping details and make sure they are correct. 
5. Choose a payment method.
6. Review your order once more and complete the payment. 

That’s it! While waiting for your order to arrive, you can track its shipping status through Mercado Libre’s website or app. Once the product arrives, consider leaving a review to share your overall purchase experience with the seller.

How to sell on Mercado Libre

If you live in one of the 18 countries where Mercado Libre operates, you can easily start selling your goods online as an individual by publishing product listings on the platform.

Additionally, businesses of all sizes in the region can open seller accounts by completing the necessary steps. Since they may vary by country, make sure to review the seller requirements specific to your location.

Mercado Libre also offers a Global Selling Program to help businesses outsite Latin America publish their products on the platform. By joining this program, business owners will benefit from additional features like automated translation, currency conversion, and integrated logistics services.

To join the Global Selling Program, you must have a BigCommerce account. If you already have one, connect your account to Mercado Libre and submit an application.

What payment options are available on Mercado Libre

The available payment options in Mercado Libre can differ depending on the country where you buy the product. In general, the platform provides:

Mercado Pago

Mercado Pago, Mercado Libre’s in-house payment system, is widely used in every country where the platform operates. It’s a digital wallet that lets users top up their balance and make effortless payments within the platform.

PayPal

PayPal is an alternative for buyers who prefer using international payment systems. This service is currently supported only in Brazil and Mexico.

Regular banking-based payment

Aside from Mercado Pago, users can make purchases with their credit and debit cards, bank transfers, or deposits.

Cash payment

Mercado Libre also lets users pay in cash once the product arrives. However, this option is only available in a few countries.

How orders are shipped in Mercado Libre

Mercado Envios will ship the products purchased from the marketplace and display delivery statuses for buyers and sellers. Once the seller receives your order, they should print the provided label and ship the product through these options:

Envios Full

This service requires the seller to drop the product to Mercado Libre’s distribution center. The platform will then handle the storage, packaging, shipping, and after-sales service.

Envios Flex

This shipping option requires the seller to deliver the product within the same day or the next day. You can use a dedicated Mercado Envios service, but the shipping expense won’t be fully covered. Alternatively, sellers can deliver the product themselves.

Collect

Sellers should pack the product, and the platform’s shipping service will pick it up for delivery.

Mercado Libre Agencies

Sellers can drop off products at designated agency locations, including third-party convenience stores, rather than dedicated facilities. Customers can then pick up their items from the same agency or a different one or opt for delivery directly to their preferred address.

Mercado Libre vs competitors

Mercado Libre ranked as Latin America’s most visited eCommerce platform as of April 2023 – nearly three decades after its founding. Several key factors contribute to its standout position among competing marketplaces in the region:

Localized approach

Mercado Libre understands Latin America’s cultural and economic nuances, allowing it to develop solutions that resonate with local users.

For instance, the platform automatically adapts to the user’s country of residence by displaying content in the local language. Its integrated logistics and payment services also cater to the region’s unique needs.

In contrast, global marketplaces often rely on generic frameworks that don’t fully address Latin America’s unique challenges, such as fragmented logistics.

Wider reach

Operating in 18 countries, Mercado Libre has deep roots in the region, focusing on major markets such as Argentina, Brazil, and Mexico. This widespread presence ensures it caters to local sellers and buyers across diverse economies.

Meanwhile, global marketplaces like Amazon are well-known in bigger countries like Brazil and Mexico but have not achieved the same scale or user engagement as Mercado Libre.

Trust and community building

Mercado Libre prioritizes building trust within its user community. With seller ratings, a protected purchase program, and financing options, it ensures accessibility and reliability, particularly for first-time online shoppers. Additionally, the platform enhances security by requiring ID verification during account registration.

Competitive pricing and accessibility

Mercado Libre attracts users with affordable product listings and seller fees. Moreover, its financial solutions, like installments and credit options, make products more accessible to a broader audience.

Conclusion

Mercado Libre is more than an eCommerce platform – it’s a comprehensive digital ecosystem tailored to Latin America’s unique needs.

By seamlessly combining a marketplace with logistics, payment solutions, and even advertising tools, it eases transactions for buyers and sellers across the region.

With its strong popularity among Latin Americans, Mercado Libre also offers foreign businesses an opportunity to enter the region’s market through the Global Selling Program.

What is Mercado Libre FAQ