January 15, 2023 – 06:00
Caution is a good word to define Mercado Livre’s strategies. In the market for 23 years, with a total of 14,000 employees, 10 million seller partners and 88 million unique users, the technology company, namely, thinks carefully before entering the industry trends. “We don’t do technology for technology’s sake,” says Fernando Yunes, head of Mercado Livre in Brazil, when asked about the company’s investments in Web 3.0, which includes the metaverse and NRFs (non-fungible tokens in English).
Which is not to say that technology is not on the agenda in Mercado Livre’s discussions and goals, as long as it is connected to the human gaze. For this year, one of the company’s goals is to improve the consumer experience, a discipline known as CX. “The future of CX depends on the combination of artificial intelligence and human care,” he says.
Mercado Livre strategy with licensed product stores
Yunes, who is also the company’s senior vice president, came to that position in 2020, in the context of the Covid-19 pandemic, and promoted a redesign in the organization, establishing behavioral skills as a core learning, and refocused the organization’s focus on the democratization of e-commerce.
In 2023, along with CX, Mercado Livre expects the growth of the fashion category — one of the strongest in e-commerce. In 2022, the company began selling products developed by the artist Rômulo de Cria. For this, Mercado Livre has created its own week, Moda Livre Fashion Trends, designed especially for users of the category, with offers of different items.
Ao Meio & Mensagem, during the Retail’s Big Show, the CEO detailed the company’s plans and gave his opinion on the competition and a possible global recession.
Meio & Mensagem – What will Mercado Livre’s CX investments be in 2023?
Fernando Yunes – What can be improved is that we will continue to evolve the use of machine learning – which allows us to understand and learn from the behavior of each user -, education and awareness of users through spreading the importance of technology so that everyone understands the countless possibilities and benefits of applying tools in your journey of providing customer service services and contact with the company. We will also focus on segmenting users who are classified as early adopters, which allows us to scale the use of technology from those users who not only use, but also prefer the technology in the various relationship processes with the companies and brands they use.
M&M – In 2020, you mentioned in an interview that the company does not see an advantage in physical stores and that the ideal model would be to not have a store. With the return of circulation and face-to-face or hybrid life, many companies report that the customer misses going to the store and are betting on experiences that combine physical and digital. Does your perspective hold? Is there an attempt by Mercado Livre to unite physical and online?
Yunes – We have followed the progress of e-commerce in recent years, fueled by social isolation, and we know that many people who have not tried it before or were apprehensive about e-commerce, have tried and adopted this form of consumption. With Mercado Livre’s investments over the years, our consumers can access a wide range of products and the convenience of fast delivery, often free, to the most convenient address, without leaving home, while finding the integration of a complete ecosystem – both for buyers and sellers -, with services and tools that facilitate purchase. Therefore, we have the online shopping experience of the habit of Brazilians and we see the potential growth of e-commerce sales, with brands expanding their capillarity when they enter our platform. We are confident in the potential of our business model.
ESG and retail: a conflict of interest?
M&M – In 2022, the company invested heavily in speeding up delivery, creating new distribution centers, etc. Apart from logistics, what are the other deciding factors today when you face competition, especially international competitors like Shopee and Amazon?
Yunes – In Brazil, we have one of the most competitive and complex markets in the world, which does not stop growing. We will continue to invest, innovate, advance and democratize the national market and provide the best experience to our consumers and partners across the country. Our sellers can take advantage of the resources and tools of Mercado Envios, Mercado Ads, Mercado Pago and Mercado Shops. On the other hand, we develop and improve products and services with customer experience at the heart of the business. We strive for excellence in the buying and selling experience, which includes not only faster delivery across the country, but also the expansion of categories, in order to continue to offer the best range and improve consumer safety with Compra Garantida, for example, the program that guarantees money back if you change your mind or get something different from what you bought, within 30 days.
M&M – Apart from the Mercado Pago brand, the Mercado Livre brand has not announced its participation in the metaverse or Web 3.0 to date. Why did you decide not to invest in this segment? How does the company view investments in new technologies, such as AR, VR, XR, etc.?
Yunes – As a technology company, we are always evaluating and creating new solutions and features. However, our culture is very clear about adopting new technologies. Here we only adopt what solves the needs or wants of our business and our users. That’s why we continue to create features or adopt innovations that change the way our users buy, sell, pay, charge and invest. We don’t do technology for technology’s sake, but it is central to our ecosystem strategy, in fact at the heart of our daily pursuit of the best experience for our customers. Today, almost 100% of operating systems are developed internally, and when this is not possible, we include strategic partners in this joint construction. Machine learning and artificial intelligence are increasingly proving to be key factors for Mercado Livre, optimizing data management to further improve the shopping journey.
M&M – When announcing the category of licensed products, the company said that it will launch new products based on user suggestions. In what other areas does Mercado Livre operate in co-creation with the user? Is it a retail trend?
Yunes – Being a born-digital company, we naturally focus on “continuous beta” and put the customer at the center of our business. Therefore, co-creation is present in everything we do in everyday life. When we listen and learn from our users’ experiences, from what is shared across our different channels and it becomes an innovation, product or service, it is co-creation. Therefore, in the evolution of the relationship between brands and consumers, listening, understanding and analyzing customer insights is fundamental. We remain attentive to our users’ needs for innovation, not only in our functional attributes, but also in the way we offer and connect with experiences.
Benefits of reselling store traffic and merchant marketing
M&M – Mercado Livre has filed lawsuits against Apple for limiting the offerings of digital competitors and only allowing its payment processor to be used. How is this process going? Is there a trend among big techs to keep more control?
Yunes – Like other companies around the world, we have accused Apple of anti-competitive practices in Mexico and Brazil, where this process is still being analyzed by the respective antitrust authorities. Our purpose for more than 23 years has been the democratization of trade and money. With this in mind, any practice that prevents access, especially to small businesses or the consumer himself, to products and services is against what we have as the essence of our business, against what we practice and defend. We remain confident that we are doing the right thing for the future of competition in digital markets and for hundreds of millions of current and potential content consumers.
M&M – How do you assess the impact of high global inflation and a possible global recession on retail sales?
Yunes – Like any company, we monitor economic indicators. This is the nature of any business with a vision of sustainable growth. In the long term, as we have done for over 23 years, we will continue to monitor key indicators and market conditions to adjust our business and continue to support our customers. We expect to continue to grow and support the country’s economic recovery by creating income for many entrepreneurs and opportunities for various professionals. We strongly believe in the economic potential of Brazil, our main market, and remain optimistic about strengthening our commitment to the democratization of trade and financial services.