The forecast: An early market mover, Mercado Libre is beating Amazon at its own game in Latin America. Launched in Q2 2009 as Mercado Libre Publicidad, then rebranded to Mercado Ads in September 2020, the regional ecommerce giant managed to gain a significant edge over Amazon in Latin America through years of multibillion-dollar investments into fortifying its retail flywheel. (That flywheel comprises ecommerce, logistics, financial services, media, and advertising.)

• This year, we expect Mercado Libre’s digital advertising business to grow by 44.5%. The company will represent more than half of all retail media ad spending in Latin America as it deploys new technologies to compete for marketing dollars that have been difficult to access.
• Meanwhile, Amazon’s digital ad revenues will also grow by double digits (29.4%) this year in Latin America to $326.6 million, but it will struggle to reverse its declining market share against more locally relevant players. This is a stark contrast to Amazon’s dominant position in other parts of the world like Canada, the US, and Europe.

The breakdown: Brazil and Mexico will attract the bulk of retail media ad spending in Latin America. As the region’s two largest retail and advertising markets, the countries’ influence on regional ad spending trends is significant. Combined, they account for more than eight in 10 retail media ad dollars spent in the region, so developments in these two markets will inevitably dictate broader industry trends.

• Accordingly, Brazil and Mexico will drive Mercado Libre’s impressive growth. Combined, the countries will account for 82.1% of the company’s regional advertising business but 72.6% of its ecommerce channel, per our estimates.
• This roughly 10-percentage-point difference underscores the outsize importance of Brazil and Mexico in helping Mercado Libre become a formidable digital advertising player both locally and regionally.

The takeaway: Retail media ad spending in Latin America will triple in size between 2024 and 2028, with Mercado Libre becoming a $1 billion digital advertising player this year.

• That’s more than double the amount of digital ad dollars that flowed through its coffers in 2022.
• By 2026, we expect the company’s digital ad revenues to nearly double once again to $1.90 billion and represent 6.7% of Latin America’s digital ad market.

Go further: Check out the full report on Latin America Retail Media Trends 2024.