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Marcos Galperin said that the Argentine recession is coming to an end: “The economy is turning around” - Infobae
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Marcos Galperin aseguró que la recesión argentina se acerca a su fin: “La economía está pegando la vuelta”
El fundador y CEO de MercadoLibre destacó que la inflación está comenzando a ceder y que las recientes decisiones de política generaron un clima favorable para nuevas inversiones
www.infobae.com
September 09, 2024
The founder and CEO of MercadoLibre highlighted that inflation is beginning to subside and that recent policy decisions have created a favorable climate for new investments.
Galperin habló sobre la economía Argentina
El CEO y cofundador de Mercado Libre habló durante el anuncio de inversión en el país (Reuters)
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The CEO and co-founder of Mercado Libre spoke during the announcement of investment in the country (Reuters)
Marcos Galperin , founder and CEO of MercadoLibre , was optimistic about the future of the Argentine economy , noting that recent changes in economic policies are beginning to have a positive effect on activity after the sharp recession at the beginning of the year. During an interview with the international agency Reuters, the businessman highlighted that several key indicators point to a sustained improvement in the economic outlook, prompting the company to resume its investments in the country .
In this regard, Galperín stressed that the company opened a new distribution center in Argentina , as part of its expansion strategy in the region. “Now we are very happy to open a distribution center in Argentina again because we believe that inflation is falling, many of the bad economic decisions have been corrected and many good decisions have been made,” he explained. According to the businessman, these changes have generated a favorable climate for investment in the medium term: “We are optimistic about the economy in Argentina in the medium term, so that has led us to invest again,” he added.
The improvement in economic indicators is also reflected in MercadoLibre’s operating results. Although the Argentine economy entered a recession during the first months of the year, Galperín said that the situation began to reverse in the second quarter. “We are seeing, in fact, in the second quarter, in the numbers that we published, a growth in terms of transactions, in items sold. So the economy is turning around, inflation is falling and interest rates have decreased dramatically ,” said the CEO, highlighting a recovery that could be consolidated in the coming months.
The Argentine unicorn's optimism regarding the performance of the economy is not new. During the presentation of its new investment, Ariel Szarfsztejn , president of commerce at MercadoLibre, had already detailed the company's view regarding local economic activity.
Szarfsztejn said on Wednesday that “the price increases registered by the economy and the slowdown in consumption were also partially reflected in the levels of activity of the Free Market.” In this regard, he stressed that this dynamic was reflected in the presentations of results to investors.
“Having said that, we do see a positive trend. We had a definitely better second quarter. The first, the Hot Sale, was a turning point for us where we saw that economic activity began to reactivate, where we saw that the search for financing and the search for price alternatives began to translate into transactions, and the truth is that from that moment onwards the trend has continued,” he added.
Last Wednesday Javier Milei visited the Mercado Libre offices and was received by Galperin
Regarding the company’s strategy, Galperín was clear in highlighting the importance of building value organically. “We don’t like buying market share. We like building market share. We like winning market share. And we like building our own innovations,” he said. This stance reflects the long-term vision of MercadoLibre, which has grown significantly in recent years without resorting to large acquisitions, but rather by focusing on the internal development of products and services.
One of the areas where the company sees the most potential is in its fintech platform , MercadoPago, which has grown exponentially in recent years. However, Galperin believes there is still much to be done. “In our fintech platform , MercadoPago, we are really just beginning to scratch the surface of everything we can do,” he said. The expansion of digital financial services is a priority for MercadoLibre, especially in markets with a high percentage of unbanked people.
This focus on finances also raised concerns among some analysts about credit quality, as the company increased the number of loans granted to consumers and sellers on its platform. However, Galperín was confident in the company’s risk management. “As long as non-performing loans are under control, and they have been, I think we will be fine,” he said.
Looking back, Galperín recalled the beginnings of MercadoLibre, when there were multiple startups trying to replicate its model in different Latin American countries. “When we started, there were forty startups doing what we were doing throughout Latin America,” he recalled. This initial competition did not slow the growth of the company, which today is the most valuable technology firm in the region, with a market capitalization of more than USD 100 billion.
MercadoLibre's progress, which has seen its share value grow by more than 1,600% over the past decade, is largely due to its ability to adapt to the dynamics of each market, with Brazil, Mexico and Argentina being its main sources of income. Despite the macroeconomic difficulties facing the region, the company remains focused on expanding organically and offering new technological solutions to its users.
