MercadoLibre.com

By Andrea Higuera, Joel Podolny, Lauren Pressman
2000 | Case No. IB19B
Founded by two Stanford MBAs in June 1999, MercadoLibre.com is an online auction site targeted at the Spanish- and Portuguese-speaking populations throughout the world. MercadoLibre.com’s first site was launched in Argentina in August 1999. The company was well received by consumers and received significant media attention, both in Argentina and in the United States. After this initial launch, the management team decided to expand into Brazil and Mexico, given that together with Argentina, these three markets accounted for over 70% of the Latin American market in terms of population, GDP, and Internet usage. Despite its success, MercadoLibre faced intense competition in the online auction space. DeRemate was another regional player that had followed MercadoLibre to each of its markets. Lokau was a strong player in Brazil who had decided that rather expand into new markets it was going to “go deep,” offering its users value-added services. International competitors like Yahoo! were also entering the market.

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