|
The Morning Ledger: MercadoLibre, Not Amazon, Rules Nascent Latin America E-Commerce Market
|
|
|
|
|
|
|
Employees work at a MercadoLibre office. PHOTO: REUTERS/NACHO DOCE
|
|
|
Hello. Amazon.com Inc.’s expansion into a wide range of business sectors has troubled many a finance chief tasked with protecting their strategic turf. For MercadoLibre Inc. CFO Pedro Arnt that job is doubly challenging because his e-commerce company competes with Amazon’s main business. But the Buenos Aires-based company has a few tricks up its sleeve when it comes to tackling the unique challenges of doing business in Latin America, CFO Journal’s Ezequiel Minaya reports.
Spend to earn. Mercado is investing heavily in logistics and payments infrastructure to deliver packages more quickly and reliably in a growing e-commerce market where many customers lack bank accounts or credit cards and have yet to be convinced that online transactions can be secure. Mercado plans to spend $2 billion on costs tied to operations in 2019, Mr. Arnt said.
[Continued below…]
|
|
|
|
Watch for threats. Amazon has a limited presence in Argentina, Mexico and Brazil, the three countries that accounted for 94% of Mercado’s total net revenue in 2018. But the threat of Amazon’s possible expansion into the region is a potent fear. In 2017, news that Amazon was recruiting in Brazil contributed to a 10% selloff of Mercado shares.
Play the long game. Mercado’s investments have eaten into the company’s profit. Since 2010, sales have risen each year, reaching $1.4 billion in 2018, according to regulatory filings. At the same time, gross profit margins have tumbled, settling at 48.4% in 2018, compared with 78.5% in 2010, filings indicate. “We are not in this to deliver profit in three to five years. We are looking to build the largest retailer in Latin America and largest [financial] services company in Latin America,” Mr. Arnt said.
|
|
|
The U.S. Commerce Department is scheduled to release factory orders figures for January at 10 a.m. ET. Economists surveyed by The Wall Street Journal expect orders for factory goods to rise 0.1%.
The U.S. Federal Reserve will begin its two-day policy-setting meeting on Tuesday. The central bank’s 19 officials are expected to release their updated projections for interest-rate increases on Wednesday.
DSW Inc., FedEx Corp., and Franco Nevada Corp. are among the companies scheduled to report earnings today.
|
|
|
|
|
Johnson Controls International PLC’s automotive-battery business, Power Solutions, sold $10 billion in bonds and loans. PHOTO: BRENDAN MCDERMID/REUTERS
|
|
|
Banks on Monday completed the largest sale of speculative-grade debt so far this year, allocating to investors more than $10 billion of bonds and loans to help fund the private-equity buyout of Johnson Controls International PLC’s automotive-battery business.
Kevin Tsujihara will step down as chief executive of AT&T Inc.’s Warner Bros. studio following a report that he had an affair with an actress and made inquiries about casting her in Warner productions, as the company continues to investigate the matter.
Maserati was meant to provide the sizzle in Fiat Chrysler Automobiles NV’s vehicle lineup after the company spun off Ferrari in 2016. But weakening demand in the key market of China and a consumer shift away from sedans are denting the luxury brand’s performance.
Managers at Goldman Sachs Group Inc. will be required to interview two diverse candidates for any open job, a push the firm hopes will change its heavily white, male workforce.
A global shake-up in the humdrum business of payments has set off a merger frenzy among the giant but obscure companies that connect banks, merchants and consumers.
|
|
|
The board of trustees of the Financial Accounting Foundation, which oversees U.S. accounting standards setter Financial Accounting Standard Board, said it is searching for new members.
The foundation is seeking new board members, a new chair for the Financial Accounting Standards Advisory Council and new members for the Private Company Council. Nominations are due by April 19.
|
|
|
|
Tesla Chief Executive Elon Musk is seen in Providence, R.I. in July 2017. PHOTO: BRIAN SNYDER/REUTERS
|
|
|
-
Tesla Inc. Chief Executive Elon Musk never sought pre-approval for a single tweet since he struck a court-approved deal about how to distribute important information about the auto maker, the U.S. Securities and Exchange Commission told a judge, Reuters reports.
-
Companies want the firms that advise shareholders on proxy proposals to face government oversight of their activities, a wish U.S. securities regulators are expected to act on as early as this spring.
-
Federal investigators and lawmakers are asking the same question about Boeing Co.’s 737 MAX jet: Did U.S. safety regulators rigorously follow longstanding engineering and design standards in approving a suspect stall-prevention feature?
-
A former vice president for the United Auto Workers union was charged Monday with allegedly receiving tens of thousands of U.S. dollars in illegal payments from Fiat Chrysler Automobiles NV executives, the latest in a widening probe into allegations of corruption in the union’s top ranks.
|
|
|
|
Loaded container imports into the ports of Los Angeles and Long Beach declined a combined 10.2% last month from the same month a year ago. PHOTO: TIM RUE/BLOOMBERG NEWS
|
|
|
-
Seaborne imports into the biggest U.S. gateways for Asia trade fell sharply in February, halting a monthslong shipping surge driven by strong consumer demand and a rush by companies to bring goods into the country ahead of potential new tariffs.
-
As U.S. officials press China to buy more than $1 trillion in American exports as part of a trade deal, computer-chip makers are saying: Count us out.
-
Caviar prices are sinking as fish eggs cultivated in China are flooding the global market for what used to be a rare delicacy.
-
Female economists say they have been discriminated against and, in some cases, sexually assaulted by their colleagues, according to a new survey by the American Economic Association.
|
|
|
Franklin Resources Inc., the San Mateo, Calif.-based investment management company, named Matthew Nicholls its chief financial officer, effective May 6. He succeeds Kenneth Lewis, who will retire on that day.
|
|
|
Mr. Nicholls, a veteran of the firm, was most recently managing director and global head of financial institutions, corporate and finance banking and global head of asset management, corporate and investment banking, a role he has held since 2017. Before that, he was managing director, co-head of financial institutions corporate and investment banking North America and global head of asset management from 2014 to 2017.
Mr. Nicholls’s compensation is valued at roughly $5 million and will include a base salary of $525,000, an annual bonus of $2.6 million, a restricted stock grant valued at $1.5 million, and a long-term performance award of $375,000, as well as relocation expenses and other benefits, according to a filing.
Mr. Lewis’ 2018 compensation totaled $2.5 million and included a salary of $525,000, stock awards valued at $1 million and a cash bonus of $900,000 and other compensation valued at $24,374, according to the company’s proxy filing.
CNO Financial Group Inc., the Carmel, Ind.-based insurance holding company, named Paul McDonough as chief financial officer, effective April 1. He succeeds Erik Helding, who is leaving the company to pursue other opportunities, effective March 29.
Mr. McDonough was most recently executive vice president and CFO at OneBeacon Insurance Group Ltd. from 2005 to 2017. His compensation will include an annual salary of $600,000, a performance-linked bonus targeted at 100% of salary and capped at 200% of salary.
Mr. McDonough will also receive an equity award of approximately $700,000—half in performance share units, 30% in restricted stock units, and 20% in stock options—and a cash award of $300,000 once he establishes a residence in Chicago, according to a filing.
Mr. Helding’s compensation for fiscal 2017, the latest data available, totaled $2 million, including a salary of $400,000, equity awards valued at $1.1 million, a cash bonus of $503,422 and other compensation of $21,831, according to the company’s proxy filing.
|
|
|
|