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INFORMATION SYSTEMS @ WORK eBay Latin American Style placed tight restrictions on cross-border e-commerce in E-commerce is taking off in Latin America and the most 2014. Individuals can buy $25 worth of cross-border powerful corporation behind this movement into merchandise each year with no tax. Once they exceed online shopping is MercadoLibre.com. MercadoLibre the $25 limit, they pay a tax of 50 percent. Moreover, com was established in 1999 when only about overseas goods can no longer be shipped directly to the consumers' homes. Instead, the shopper must 2 percent of the region's population had Internet access and only about 10 percent of online users travel to a customs office, wait in line, and fill out the shopped online. Yet, within one year, by 2000, necessary paperwork before the purchase is handed over MercadoLibre.com was up and running in six Latin Obviously, this new policy will put a dent on American countries. Finishing his MBA at Stanford University in 1999, MercadoLibre.com's sales. However, it is likely to the company's founder and current CHO Marcos hit U.S. and European-based e-commerce giants, Galperin noted that across the continent, only large such as Amazon and eBay, much harder. Still, the cities had good retail alternatives His plan was to open company's name, Mercado Libre, means "free trade" and many consumers and sellers will no doubt see up e-commerce to people living in the smaller cities and towns. Often called the "eBlay of Latin America," these new restrictions as an encroachment of this MercadoLibre.com originally offered an auction principle. marketplace, but quickly developed the preferred "fixed-price" model, in which sellers offer their goods Discussion Questions for a fixed price. Galperin explains, "The goal was to capture an 1. What were the market conditions prior to increasingly larger share of all e-commerce activity MercadoLibre.com's launch" Were these ideal occurring in the region. This meant improving conditions for the company? Why or why not? MercadoLibre, our online marketplace, as well as the 2. What technological tools did MercadoLibre.com MercadoPago payments business unit, MercadoClics need to develop to make its e-commerce platform advertising group, and MercadoShops e-building viable? solutions, respectively." Galperin's plan worked. Headquartered in Argentina, today the company services 11 other Critical Thinking Questions countries in Latin America-Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico Why did the "fixed-price" option work best in Latin Panama, Peru, Uruguay, Venezuela-and recently America? launched operations in Portugal. Within the first nine 2 Is Argentina justified in restricting cross-border months of 2013, over 60 million transactions took place e-commerce? Why or why not on MercadoLibre.com. This represents a growth of over 25 percent from the previous year. SOURCES: "Mercadolibre, Inc. to Report Fourth Quarter and Full Year Yet the rapid growth of e-commerce does have its SicilAmateur, February 21. 2014. raw dangers to shaky South American economies. Between -andful pur Joly financial-result: "Enderror 2012 and 2013, the number of Argentinians engaged in on MercadoLibre,* Endarter. May 15. cross-border online shopping doubled to 1.5 million mcadadore wefreport: MercadoLibre citizens. Argentina, however, has been using its foreign Hor Ecb tile, Mop finewor mercadoilire com belarus can currency reserves to pay back its foreign debt since its hisorio Negocio De Vender A Traves Dy Internet" in, February 17, 3014. bup,/www.Priornofans 2000-2001 economic crisis. As e-commerce has risen, the country has watched its foreign currency reserves werner- 17023014. "Argentina Restricts Online Shopping as Foreign seep across the border. Argentina's foreign currency erves Drop," ABC News, January 12, 2014, www.ber co. we hew's aris-amaka-25836708: "Argentina Imposes Tight Restrictions reserves dropped by 30 percent in 2013. Worried about on Cross-Burder E-Commerce," Pow and Parcel, January 21. 2014, Hipd' its already shaky financial position, the government wan dparcel info 39605 heirs teguiuriout argenrina imposes-night