MercadoLibre has long been Latin America’s preferred ecommerce platform. In countries like Mexico and Brazil, Amazon is growing steadily in the amount of revenue it produces, but still only has about half (or less) the amount of monthly visitors to their site as MercadoLibre. One need only look at the rise of MercadoLibre on the stock market to get an idea of the incredible growth they have seen over the last few years.
What factors have spurred this growth? While the recent pandemic has influenced a large shift towards ecommerce around the globe, much of MercadoLibre’s success is tied to its ability to understand LATAM’s consumer base and dominate in both the payments and fulfillment spaces.
MercadoPago may be one of the strongest factors driving MercadoLibre’s growth in Latin America. MercadoPago is a digital wallet tool similar to Apple Pay or Google Pay. Customers can add money to their account in a number of ways, but most importantly, cash could be added at a number of physical locations, and it can be used as a method of payment on MercadoLibre’s marketplace.
Suddenly, the roughly 40% of LATAM adults who did not have a bank account and consequently a debit card, could now make purchases online. MercadoLibre made another brilliant move in 2015 by creating MercadoPago mobile points of purchase, another way to further entrench users in its ecosystem. Amazon, on the other hand, may not be as accessible to customers. On Amazon Brazil, for example, the only ways to pay are with a credit card, or a “Boleto,” which provides a barcode you can scan and pay using some banking apps.
MercadoLibre has built an impressive fulfillment network in LATAM in a similar fashion to Amazon in the United States. Customers in Mexico, Argentina, Brazil, Uruguay, Chile, and Colombia can receive products with free shipping and often with 2-day delivery (with more rural areas having longer delivery times). The number of products shipped through MercadoEnvios had been growing steadily every year, with 306.9 million shipped in 2019. With the explosion of online shopping in 2020 though, they more than doubled their volume, shipping 649.2 million products.
However, Amazon is a formidable competitor in this space. Amazon already boasts an impressive fulfillment network in Mexico. In 2019, they launched Prime in Brazil, offering 48 hour delivery to over 90 municipalities. Additionally, 3 new warehouses were announced in Brazil in 2020 as they try to keep up with major ecommerce competitors MercadoLibre and MagazineLuiza.
MercadoLibre still controls 28% of Latin American ecommerce, compared with Amazon who only has 4% at the moment. We expect Amazon to continue to grow as they have in Canada, Europe, and other global markets, but MercadoLibre, as deeply entrenched as it is, is not likely to ever be unseated as LATAM’s most popular and most accessible ecommerce platform.
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If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.
Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.
At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead.
An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.
A great Amazon SEO Agency partner will:
Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance.
Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS.
To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.
A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.
It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.
Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins.
Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.
As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.
Contact us to learn more about our SEO optimization services.