E-commerce giant Amazon, Inc. AMZN reported first-quarter results in April that showed the slowest revenue growth since the dot-com bubble burst in 2001, and issued a weak forecast for the June quarter.
Do the company's fundamentals reflect an industry-wide trend, precipitated by macroeconomic uncertainties and geopolitical tensions?
The first-quarter results of a smaller rival operating in the developing economies of Latin America suggest otherwise.
Defying The Downturn: Buenos Aires, Argentina-based MercadoLibre, Inc. MELI reported late Thursday with first-quarter net revenue of $2.2 billion, up 63% year-over-year. On a currency-neutral basis, the growth amounts to a steeper 67.4%. This is far higher than the 7.3% growth reported by Amazon for the same period.
Canadian e-commerce company Shopify, Inc. SHOP also reported a marked slowdown in revenue growth for the first quarter.
Amazon is the 900-pound gorilla of the e-commerce industry, and given the strong growth achieved over the years, every incremental improvement comes up against tougher comparisons.
Still, MercadoLibre's outperformance cannot be belittled.
Gross merchandise volume, a key performance metric for e-commerce companies, climbed 27% at MercadoLibre, and total payment volume jumped 72% to $25.32 million. The growth was led by Argentina and Brazil, with improvement in both engagement and buyer frequency.
The company's thriving fintech business, comprising payments and credit, generated record revenues.
MercadoLibre Cautious On The Near-Term: While conceding that macroeconomic and sociopolitical uncertainty in Latin America pose risks, MercadoLibre said it will continue to invest in its core e-commerce business to fuel further growth.
"To develop more products and accelerate our ability to deploy them, we are also investing in the growth of our team, and we aim to onboard nearly 14,000 new employees this year," the company said.
Amazon said last month it expects second-quarter revenue of $116 billion to $121 billion, below a consensus estimate of $125.5 billion. The forecast suggests a further slowdown from the first quarter's anemic pace.
MELI Price Action: MercadoLibre shares were jumping 4.36% to $953 midday Friday, according to BenzingaPro data.
Related Link: What 7 Analyst Ratings Have To Say About MercadoLibre
Photo courtesy of MercadoLibre.
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