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MercadoLibre's CEO Presents At Deutsche Bank Access 2012 Technology Conference - Transcript

And the key thing about the ecosystem for us, of course, is that anyone who's using any of those pieces we can cross-sell the different pieces of that ecosystem to them. And so as distribution channels, they work very synergistically amongst themselves.

Question-and-Answer Session

Ross Sandler

Great. So I thought we'd start with just a macro given that I think most of the audience here is based or is focused a little more in the US. Can you just give us an update on what the environment is like right now in kind of your core retail business across the various regions? And has the macro environment changed materially in the last call it two or three quarters visa vie where we are today?

Pedro Arnt

So I think -- so there's two relevant I think pieces to look at macro, right? The first one is looking at online commerce and how early days it still is and the tremendous tailwinds that that secular shift from offline retailing to online retailing presents for a company like ours. So, online commerce is still less than 3% of overall retail in the region. The online payment space is extremely nascent. And so we're operating with these tremendous tailwinds that should sustain for quite a long time.

And so whether GDP in the region is growing 4% or is it growing 3%, we're fairly isolated from that. At the margin, obviously it's significant. But we have a business model that, A, is just helped by the overall context of constantly growing online commerce. And additionally, the marketplace has typically proven itself to be much more resilient than traditional retailing even in times of tougher macro. So we've gone through economic crises in Argentina, in Venezuela over the last 12 years, and the marketplace continued to perform relatively better than the overall macro and retail space even those times of tougher economics because consumers typically could start looking for selection in price more intensely when macro conditions are less favorable. So I think that's an important backdrop.

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