MELI vs. JD: Which Global E-commerce Stock Has More Upside?

Core Insights - MercadoLibre (MELI) and JD.com (JD) are leading e-commerce platforms outside the U.S., with MELI dominating Latin America and JD.com in China, both evolving into integrated ecosystems combining commerce, logistics, and fintech [1][2] Group 1: Business Models and Growth - MercadoLibre operates on a marketplace-centric, asset-light model, achieving 39% revenue growth in Q3 2025, compared to JD.com's 15% growth, but faces margin compression with operating income growing only 30% [3][4] - JD.com has a vertically integrated logistics infrastructure, with 24% revenue growth in marketplace and advertising in Q3 2025, and a significant increase in active merchant counts by over 200% year-over-year [10][8] Group 2: User Acquisition and Fintech Operations - MercadoLibre reached 75 million quarterly active buyers, adding 7.8 million in Q3, but aggressive spending on free shipping and promotions has compressed contribution margins [4][5] - JD.com is expanding into higher-margin areas like food delivery, although profitability in this segment requires navigating intense competition [10][8] Group 3: Financial Performance and Valuation - MELI's 2025 EPS is estimated at $39.80, reflecting a 5.6% year-over-year growth, while JD's EPS is pegged at $2.82, indicating a 33.8% decline [6][11] - Over the past six months, MELI shares declined 18.5%, while JD shares fell 8.7%, indicating greater investor confidence in JD's balanced growth approach [12] - MELI trades at a forward earnings multiple of 33.8x, while JD trades at 9.3x, suggesting a premium for MELI's growth expectations despite JD's consistent margin expansion [14] Group 4: Competitive Positioning - JD.com's disciplined approach balances growth with margin expansion, positioning it favorably against MercadoLibre's strategy that sacrifices profitability for market share [17] - The contrasting market expectations are evident, with JD's valuation discount appearing attractive given its ability to sustain double-digit growth while improving profitability [14][17]