This is an excerpt from the 2019 edition of Mexico Automotive Review. Don’t miss the opportunity to get the latest insights from key automotive players. Register now to get your tickets for Mexico Automotive Summit on October 2, 2019!
Amelie Mossberg is Commercial Director of Motors Classifieds at Mercado Libre México. Mercado Libre is a technology company that operates online marketplaces in 18 countries in Latin America. It was founded in Argentina in 1999 and is the biggest e-commerce player in the region.
Q: What is Mercado Libre’s strategy to boost vehicles sales in a contracting sales environment?
A: We are a technology company that constantly improves its platform to deliver a great user experience by creating new tools that users appreciate, such as our new price comparator and allowing users to connect with us on their smartphones through WhatsApp. Around 80 percent of all searches made in Mercado Libre are done through either our app or a smartphone and 80 percent of all traffic is organic. Mercado Libre’s automotive classifieds section accounts for 7 million visitors per month and seven vehicle searches per second. We receive the most traffic of all the site’s sections, which showcases user interest in online vehicle sales. The millennial generation, which will account for 40 percent of all car buyers by 2020, has a different way of looking for information and comparing vehicles before making a purchase decision; Mercado Libre provides exactly the tools they need.
Q: Why should brands choose Mercado Libre as an online sales platform instead of building their own?
A: We offer brands the opportunity to build an official e-store within our platform to achieve greater brand exposure. OEMs such as Audi and Nissan, as well as dealership groups including Grupo Kasa Automotriz or Grupo Witt, already have e-stores on Mercado Libre. However, not all players in the automotive segment are interested in investing in digital marketing, preferring to develop their own online dealerships. The problem is that they lack the strength to attract potential car buyers, which Mercado Libre manages thanks to its long-standing experience.
In 2019, Nissan developed a partnership with Mercado Libre with the goal of using our platform to provide its potential customers with a digital experience when looking for a new car. We created an e-store for that brand and we support it through online advertising. As a result, Nissan can raise brand awareness and generate digital leads.
Q: What is Mercado Libre’s strategy to promote e-stores among automotive companies?
A: The automotive industry in Mexico and abroad is aware of the shift from offline to online sales but companies need a little push to take the required steps toward this transition. Mercado Libre provides that nudge. Five years ago, Mercado Libre used to go dealership to dealership to offer its e-store solutions. We changed our strategy to target OEMs and dealership groups directly to deliver a more structured solution. Mercado Libre also offers seminars to members of AMIA, ANPACT and AMDA to raise awareness about digitalization and how companies can transform their operations.
Q: What enticed Mercado Libre to start offering e-stores to brands and dealership groups?
A: Historically, classified sales traditionally focused on used cars. In 2016, we noticed that sales were going well in this segment and decided to also target the new-vehicle segment. Mercado Libre faced some resistance at first because brands did not want to mix its new-vehicle offering with used cars but we have seen significant growth in the former segment. Up to 95 percent of all cars sold on our platform are used but the number of classified ads for new vehicles increased 25 percent between 2018 and 1Q19. We also increased the number of official vehicle e-stores by 30 percent in 1Q19 compared to 4Q18 and expect to maintain that momentum.
The e-commerce market is becoming increasingly professionalized, which boosts cooperation between Mercado Libre and brands and dealership groups. An average of 100,000 vehicle ads are posted on Mercado Libre every month. Last year, half of these vehicles were posted by private individuals and the other half by dealership groups and brands but this balance has changed. In May 2019, around 60 percent of all vehicle ads were posted by dealership groups and brands and the rest by private individuals.
Q: How has Mercado Libre’s payment platform MercadoPago incentivized online vehicle sales?
A: In June 2018, we launched a service that enables users to lay away the car that they want to purchase online through MercadoPago, which also helps generate digital leads for sellers. MercadoPago offers both buyers and sellers more confidence because it prevents potential payment problems. People who use this platform are usually well-acquainted with Mercado Libre and previously have used MercadoPago to buy other products.
At Mexico Automotive Summit 2019, Rodrigo Hütt will represent Mercado Libre during the Mobility and Sales in the Digital Era panel, which focuses on the efforts of dealerships and suppliers to embrace digitalization trends in sales and how the industry can cope with mobility challenges. Register now to find out more.