The American Amazon was transformed this year into the most valuable company in the world, to overcome none other than the very Google and the giant Apple.
With a capitalization of 916,000 million dollars, it doubles Alibaba, its Chinese competitor, which holds a stock market valuation of US $ 415,000 million.
In this way, the combined value of the two "owners" of the global electronic commerce triples the GDP of Argentina, valued at US $ 477 billion, according to data of April of this year published by the IMF.
After Amazon and Alibaba, Argentina's Mercado Libre appears, with a strong presence in Latin America, with a valuation of nearly 29,000 million dollars, which, by the way, is five times greater than that of YPF.
To explain the magnitude of the firm led by Jeff Bezos, José Bano, financial advisor of Invertir Online, exemplifies: "Each and every one of the Argentineans would have to work 23 months and 5 days without spending a single penny to be able to buy together Amazon. "
In other words:
- Two Argentine GDP are required together to match the valuation of the firm commanded by Jeff Bezos
- In the case of Alibaba, only that company has a market value very close to the gross domestic product albiceleste
The comparison between the value of these companies with the domestic GDP tries to show the colossal size that they have acquired from this type of companies.
To take an example, Amazon equals:
- 150 times YPF
- 33 Free Market
Outside the United States and China, the Argentine unicorn is the highest valued stock market technology. Of the three big ecommerce companies, Marcos Galperín's signature is the one that recorded the biggest increase in the price of its shares, since they doubled so far in 2019 and multiplied by four in the last three years.
In addition to the comparison between the titans of global electronic commerce, it is not a minor fact that arises from "measuring" Mercado Libre with respect to other high profile firms in the domestic sphere.
"It is by far the largest company in Argentina, with its rapid growth and expansion to other areas, equivalent to the sum of Tenaris, Telecom and YPF, which are the three that follow in size among the contributors," says the expert from Invest online to iProUP.
Physical trade vs. electronic
The stock market valuation of these companies corresponds to the magnitude of the ecommerce in the economies of their countries of origin.
In the global battle between physical and electronic commerce, China holds the highest rate in the world: 35% of sales in that nation are already coming from the online channel. It is followed by the United States, with 11%, according to an eMarketer investigation.
Although the United States was long in the lead, it was overtaken by the Asian giant back in 2013. For the current year, it is projected that the Internet, as a marketing channel, will scale more than 30%. Speaking in silver, it is equivalent to almost 2 billion dollars and, in comparative terms, the data is devastating: it will concentrate half of all online sales in the world.
It is followed by the United States, whose ecommerce market will register an increase of 15% in 2019, equivalent to US $ 600 million. That is, less than a third of the projections corresponding to the Asian giant, according to eMarketer.
Both countries are the global kings of electronic commerce. Clearly, such increases are the product of exports and the growing use of online payment methods, say the consultant.
In the particular case of China, the pronounced progress is also due to the increase in the country's wealth, which "catapulted" millions of citizens into a middle class with greater purchasing power. Alibaba is the undisputed leader of ecommerce in that territory, with an astonishing participation: 53%.
As regards the United States, the rise is enhanced by sales of electronics and clothing. Like Alibaba in China, Amazon controls almost 50% of the US market, beating the top 10 players that run behind.
"In Argentina, ecommerce also grows and will continue to grow," Diego Urfeig, executive director of the Argentine Chamber of Electronic Commerce (CACE), told iProup. The statistics give him the reason: three years ago, 42% of online purchases occurred on a regular basis, a figure that has already increased to 49%. As part of this process, marketplace applications, such as Mercado Libre, are gaining space at accelerated rates.
"Consumers incorporate digital channels as one more tool," Urfeig explains, adding: "Marketplaces have a leading role and the field is open for new ones to appear."
In his opinion, this greater role is due to the fact that they were able to take advantage of the large volume of data they use to interpret, very precisely, what the consumer is looking for. "More than winning money, they pursue the best experience and customer satisfaction, thus increasing their penetration in the market", exemplifies.
Despite the numbers on the rise, for many electronic commerce continues to present some obstacles: delays in deliveries, distrust in the sites and little security in the means of payment.
"These problems are being attacked by the giants of electronic commerce, such as Mercado Libre, Amazon or Alibaba," analyzes Urfeig of CACE. In this sense, he explains that, to reduce distrust, the platforms offer a guarantee. And, on the other hand, the problem of lack of funding attacked with virtual wallets.
The numbers of the growth of the ecommerce are forceful, in the frame of a constant innovation: Alibaba develops in China a futuristic mega city; Amazon gets into the smart home and tests the delivery of orders with robots or drones; Mercado Libre is revolutionizing payment methods and entering new business units.
The Mercado Libre case
Argentina also has its electronic commerce giant. Mercado Libre operates in 18 countries in Latin America and has 267 million registered users. The figures of its last quarterly report showed impressive growth in both the ecommerce and fintech segments.
During the first three months of the year it registered sales of US $ 475 million, a figure that represented an inter-annual increase of more than 47% in dollars.
The "vedette" of the firm commanded by Marcos Galperín now has been its financial leg (Mercado Pago), which showed a strong advance and broke all the records: 144 million transactions (94% growth) for a total of US $ 5. 640 million (year-over-year increase of 35% in dollars).
In addition, the results reflected how the unicorn is stretching its tentacles over the physical world through its virtual wallet. Mercado Pago showed the following achievements during the first three months of the year:
- The volume of payments outside Mercado Libre exceeded US $ 2.5 billion (up 120% year-on-year in dollars)
- Quadrupled the number of active users of the virtual wallet
In a complicated year for the Argentine economy, with a fall in activity and a drop in consumption, the company founded by Galperín is progressing in several projects by 2019.
While 1,000 people joined the company in 2018, this year they expect to hire 1,250 new employees, 500 of whom will be involved in software development, according to iProUP.
The last big announcement was in the city of Córdoba: the CEO of the company showed up with Governor Juan Schiaretti to inaugurate the 6,000 square meter facility that Mercado Libre will use to develop artificial intelligence solutions for its fintech business.
He is also working in a distribution center in the Central Market, which expanded to double its size. "It represents a total investment of u $ s71 million dollars, which will allow the automated classification of more than 14,000 packages per hour," said the firm. There, loading, unloading, classification and packaging services for electronic commerce are provided. Similar centers only worked in Brazil and Mexico.
Another of the divisions in which they will continue to place special emphasis is Mercado Pago. The application became last year the largest wallet in the region. It allows you to pay in more than 260,000 physical stores, earn profitability for the balance in account, pay for services, make transfers and have a credit card.
In this way, Mercado Libre imitates the model of Alibaba, which expanded its business with the Fintech Ant Financial and popularized the payments with QR that the Argentine firm later adopted in Argentina and, for a few weeks, in Mexico. By the way, it continues to grow and prepare itself before an eventual Amazon landing in the ecommerce of the region.
