MercadoLibre vs. Shopee: Who Should Investors Watch in Latin America?

The Competitive Landscape in Latin America: MercadoLibre vs. Shopee

When investors think about MercadoLibre (MELI), comparisons to Amazon often come to mind. This makes sense as both companies dominate online marketplaces, operate their own logistics networks, and increasingly rely on advertising as a growth engine. MercadoLibre is frequently referred to as the "Amazon of Latin America." However, if you're trying to understand MercadoLibre's biggest threat, Amazon isn't the company to watch. The real competitor is Sea Limited's (SE) Shopee.

Why Shopee Matters More Than Amazon

Amazon is an e-commerce powerhouse but has struggled to gain significant traction in Latin America. The challenges are structural: fragmented infrastructure, high logistics costs, and a consumer base often lacking access to traditional banking. Amazon has invested heavily in the region but hasn't cracked the code. Shopee, on the other hand, has made rapid inroads. The Singapore-based company entered Brazil with a familiar playbook employed in Southeast Asia: low prices, gamified shopping experiences, and seller-friendly policies. This approach has resonated with cost-conscious Latin American consumers. The result has been remarkable. In just five years, Shopee has become the market leader by order volume while continuing to grow rapidly and profitably. According to SimilarWeb, Shopee's app ranks first in Brazil in terms of usage, followed by MercadoLibre in second place. The Brazilian e-commerce business is no longer a side project for Shopee; it has become a serious competitor on MercadoLibre's home turf.

Competing on Two Critical Fronts

What makes Shopee more formidable than Amazon is that it competes with MercadoLibre on both of its critical pillars: commerce and fintech.

1. Commerce

Shopee has been willing to sacrifice margins to win customers. It offers low seller commissions, frequent promotions, and aggressive shipping subsidies. Shopee also operates its own logistics network. This has forced MercadoLibre to react by expanding its free shipping threshold in Brazil to purchases above 19 reais (approximately $3.40), down from 79 reais previously, and cutting seller shipping costs by up to 40%. In other words, MercadoLibre isn't ignoring Shopee; it's already modifying its business model to defend its market share.

2. Fintech

Sea's financial arm, SeaMoney, is also growing rapidly in Southeast Asia. In the second quarter of 2025, its revenue jumped nearly 70% year-over-year to $883 million. The business encompasses digital wallets, credit, and other financial services. In Latin America, Sea's fintech presence is still small compared to Mercado Pago, which boasts 68 million monthly active users and a $9.3 billion loan portfolio as of Q2 2025. However, Shopee has demonstrated its ability to build a thriving commerce-payments ecosystem in other regions. If it can replicate this in Latin America, the competitive threat becomes significantly more serious.

What About Temu and Nubank?

Shopee isn't the only company targeting MercadoLibre. Temu, owned by PDD Holdings, has been flooding Latin America with ultra-cheap goods using cross-border shipping from China. It has gained users quickly, but without local logistics or payments infrastructure, it's more of a disruptor in the bargain segment than a full-fledged rival—at least for now. On the fintech side, Nubank poses a real threat to Mercado Pago. It has built a substantial user base in Brazil, expanding into deposits, lending, and investments. However, it lacks the integrated e-commerce engine that ties MercadoLibre's ecosystem together. This is why Shopee stands out. It's a rare competitor attacking both sides of MercadoLibre's competitive advantage simultaneously.

What This Means for Investors

MercadoLibre remains the dominant force in Latin American e-commerce and fintech, with advantages of scale, a trusted brand, and an integrated logistics network. However, the competitive landscape is evolving. While Amazon may be the easy comparison, Shopee is the competitor investors should truly monitor. It's growing market share in Brazil, forcing MercadoLibre to adjust its pricing and shipping strategies, and rapidly expanding its fintech operations. For long-term investors, this means two things: * Latin America continues to offer significant opportunities, and MercadoLibre's years of operational experience remain a key asset. * MercadoLibre now faces a considerably more serious competitive threat from Shopee, which could exert pressure on margins and alter its growth trajectory. In conclusion, monitoring Shopee's momentum may be as critical as tracking MercadoLibre's own performance in the coming quarters.