Good day, ladies and gentlemen, and welcome to the MercadoLibre’s First Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will hold a question-and-answer session and instructions will follow at that time. (Operator Instructions) And as a reminder, this call is being recorded. I would now like to turn the conference over to management.

Hello, everyone, and welcome to the MercadoLibre earnings conference call for the quarter ended March 31, 2013. My name is Alex de Aboitiz, and I am the Head of Investor Relations for MercadoLibre. Our senior manager presenting today is Pedro Arnt, Chief Financial Officer. Additionally, Marcos Galperín, Chief Executive Officer; and Osvaldo Gimenez, Executive Vice President of MercadoPago, will be available during today’s Q&A session. This conference call is also being broadcast over the Internet and is available through the Investor Relations section of our website. I remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the Company, industry trends, and product and technology initiatives. These statements are based on currently available information and our current assumptions, expectations, and projections about future events. While we believe that our assumptions, expectations, and projections are reasonable, in view of the currently available information, you are cautioned not to place undue reliance on these forward-looking statements. Our actual results may differ materially from those discussed in this call for a variety of reasons, including those described in the 'forward-Looking Statements' and 'Risk Factors' sections of our 10-K and other filings with the Securities and Exchange Commission, which are available on our Investor Relations website. Finally, I would like to remind you that during the course of this conference call, we may discuss some non-GAAP measures. A reconciliation of these measures to the nearest comparable GAAP measures can be found in our first quarter 2013 earnings press release, also available on our Investor Relations website. Now, let me turn the call over to Pedro.

Thanks, Alex, and good afternoon to everyone joining us today. The MercadoLibre ecosystem was off to a good start in 2013. Our key business metrics accelerated in the first three months of the year as our ongoing initiatives showed strong momentum, despite still facing some tough comps that will continue to get easier as the year progresses. During the first quarter, 4.2 million new registered users came to our site, growing our base of confirmed registered users by 23% year on year; successful items grew 20%, reaching 18.1 million; our number of payment transactions grew 38%, to 6.7 million; gross merchandise volume on the platform was $1.6 billion, growing 30% when measured in local currencies; and total payment volume reached $532 million, growing 62% when measured in local currencies. Additionally, the growth rates for new users, items sold, payments volume and merchandise volume all accelerated versus the prior quarter, gathering momentum that we hope to build on across our businesses as we move forward with the year. Perhaps even more important than this acceleration to current growth rates are the sustainable long term prospects for our business as e-commerce takes center-stage in our region, penetrating traditional retail on the basis of continued growth in both the number online shoppers and per capita on-line spending, driven by better connectivity, improved trust, and better usability and efficiency of on-line offerings. Currently, e-commerce in Latin America represents roughly 3% of total retail commerce. This is clearly still very early stages and underscores that the most relevant competitive dynamic we face is the rate at which we can convert offline shoppers to online shoppers. We are confident that our scale, brand ubiquity, and focus on offering a better shopping experience online than what consumers can find offline, will allow us to capture this shift…

At this time, we'd like to begin our question-and-answer period. (Operator Instructions) Our first question is from Jordan Rohan of Stifel. Your line is open, please go ahead.

So the question is, you guys are doing a job in Brazil, a lot of this (indiscernible) led by payments, not sequentially, I know there's pressure on gross margins, can you give me an idea on how much lower you expect gross margins to trend and if you are indeed bundling the pricing of MercadoPago into the marketplace listings here or your final value fees, if you will, how can you forecast growth without also increasing the take rate? As penetration of Pago increases, it seems like the cost associated with providing Pago, which are driving average tickets sold, could actually continue to correct margins over time. Can you talk about that balance? Thanks.

So I think what we've always said is the following. There is a clear connect between the gross margin compression and the evolution of the payments business but there are also drivers going forward that help to offset that gross margin compression, and let me run quickly through those. The first one which you anticipate is pricing obviously, which we haven't really acted upon for quite some time now. Take for instance our largest market, Brazil. The last time we increased the bundled final value fees was in October of 2010. So as we've always said, we take the long-term approach here, we're not managing to short-term take rate increments, but we understand that that is a strong driver to offset gross margin compression going forward. The second one, as the business scales, is obviously we have increased negotiating power with the credit card processors, we have seen improvements over time in what we pay in of average [MVRs] (ph), and going forward as the business continues to grow, that should continue to be the trend. A third one that's very relevant is also mix. Credit card obviously has the highest cost structure, it represents roughly two-thirds or slightly more than two-thirds of processing mix today. We have not very actively managed that but other payment processors similar to ours do manage that more actively, and that's something we can do going forward, shift the mix to other less expensive funding sources. So having said that, obviously we don't guide going forward, but I think what we've always said is that we are comfortable in managing a healthy gross margin profile as the business grows, understanding that you will continue to have declining margins, but that there are offsets to operate, and at the end of the day, really what we're managing is for maximizing earnings and not any specific margin profile.

Okay, and do you see significant amount of volume yet off of the MercadoLibre Marketplaces for Pago?

So that business continues to grow with a very strong pace. I think in the past we used to indicate that off platform total payment volume was less than 10%. We can certainly no longer say that. So it's already in the double digits and continues to show very strong evolution.

Our next question in queue is from Gene Munster of Jaffray. Your line is open, please go ahead.

Good afternoon and congratulations. We still haven't seen a lot of the impact from some of the platform changes and the results and obviously a year ago, we saw that, or a year and a half ago, we saw that big jump in some of the growth rates based on some of the platform improvements. How should we be thinking about the potential for reacceleration maybe late this year or beginning of next year as some of these API and some of the shipping initiatives start to become more available and more impactful for the overall platform?

Gene, this is Marcos. We look at that platform, our opening up of the platform as really a long-term project and process really. We announced also last quarter, a $10 million fund for companies that will be developing applications on top of our APIs. We are seeing many things going on, we are very excited, to begin with internally, our ability to execute faster and more rapid changes, and our ability to execute across different platforms, different mobile devices, and also to connect our platform with the different for example shipping courier in the region. So we are seeing lots of things going on, we are talking to many developer companies that are in the process of integrating our platform to different solutions in the region, the IT solutions, the shipping solutions, even tax solutions across the different countries, we believe there are really many, many opportunities for developers to do many applications that can save time and money and enable our sellers to sell larger volumes more efficiently, and also even to navigate MercadoLibre in a friendlier way. So we do believe there are lots of opportunities for developers and we are very excited with our opening up of the platform. We are also working a lot with the developers community, we are doing (indiscernible), we are doing – we did (indiscernible) for instance in the last six months. So we will continue to focus a lot in fostering the developers' community.

Do you know when those two factors, the shipping and the API, could start to have a measurable impact on the overall GMV in 2014?

As I was saying, we don't like to quantify on our GMV on a quarter-by-quarter basis, we like to think of this really as a pivotal change in the Company, one that would enable us to execute substantially faster and more efficiently and to capture significantly more opportunities than the ones we have been capturing up till now because we will ourselves be able to develop faster and in addition enable thousands of developers across the region to develop on top of our platform and therefore produce solutions that can help our buyers and sellers trade more efficiently. So the impact is going to be in the next 10 years, not in the next several quarters.

Okay, that's helpful. Thanks and congratulations.

Our next question in queue is from Mark Miller of William Blair. Your line is open.

First question is, could you expand on what you've learned about fulfilment, and as you have structured the deals with carriers, what portion of the listings are now having covered by these distribution agreements, and what are you seeing in terms of repeat purchase rates? And then looking ahead, as you roll this out to more countries, I mean what portion of the product mix might we see with a more controlled environment for fulfilment, are we talking 10%, 25%, some sense for where this could go by year-end would be great? Thanks.

So this is definitely still the early stages of our efforts in shipping. Let me clarify for everyone what it is that we have live and working in Brazil and now Argentina, is goods are still being shipped from the locale of our sellers, there is no centralized fulfilment hub that's being run by us or a partner. So really what we have done is we have launched the technology overlay that essentially connects carriers with sellers, that establishes a volume arbitrage, if you will, and the prices are negotiated on behalf of the entire volume of sellers, and perhaps the most insightful thing for us is that it now gives as visibility into sellers' packing times, shipping times, and delivery times, and also gives us confirmation of delivery. So by having set out that technology overlay, we now have an end to end tracking of the process, which begins to service with data that we think we can leverage very intelligently to improve buying and selling on the platform. It will allow us to have higher demands on sellers in terms of picking and packing and handling time and it will allow us to understand end to end delivery of goods. Perhaps even more importantly to your question, this is literally the very tip of the iceberg. In Brazil, we are still doing single digits, more towards low single digit thousands of units shipped per day on a platform that does multiples of that overall. So again, we don't usually try to guide or forecast. I think the product is working, it's working well, and it's being rolled out to different markets and to different carriers, and more importantly, it really changes the ball game in terms of the way marketplaces used to be run and the way they can be run in the future, where the marketplace manager really begins to have significant data and oversight over the shipping piece as well. But again, early days, I think your double-digit percentage is probably an aggressive forecast for the next eight months, but longer-term, our vision is to have significant portions of the marketplace transactions being shipped through our shipping platform.

So just as a follow up to that, Pedro, could you highlight the things you're doing to try to accelerate it as fast as you can, the adoption, because it sounds like the user experience is going to be enhanced and the metrics you're cracking sound like they're better, so what can you do with it to drive that to the extent it's in your control?

So the playbook is very similar across trying to drive adoption on any of these value-added services, whether it would be payments, shipping, or you name it. The first thing is to continuously innovate on the product and the platform to make sure that it works as seamlessly as possible. And then the second one is to align incentives. So certainly the discounted or the negotiated on behalf of the combined volume of all our sellers is a strong selling point, in that it drives costs down versus what these sellers could get on their own. And then the final piece to aligning incentives is obviously around feedback, ratings and placement on search results where we are increasingly driving a more important part of the sorting algorithm will come from your shipping capacity and whether you're on-boarded or not onto the platform, and likewise seller ratings, although they won't be granular ratings that specifically asks for feedback on shipping, will most likely begin to incorporate shipping into the feedback algos. That's probably the three things we'll focus on for a while now given the penetration is still low and there is significant growth going forward.

Okay, that's great. I have one other question, which is the local currency growth in GMV up 30% versus 20% plus growth in items sold, in the past there's been a closer connection between these two metrics, so the question is why is the average unit price going up, is this due to product category mix or geography or some other impact did by currency change? Thanks.

So it's a combination of the factors you mentioned. So, you have an implied impact on average selling prices is what you're mentioning. Some of that is driven by U.S. dollar inflation or local currency inflation that gets ported over to the reported dollar numbers, some of that is driven by actual positive mix shift on a sequential basis in terms of category structure and products being sold, and again this is something that will probably be volatile because of those two factors, relative currency swings and oscillating mix shifts between product categories.

Our next question in queue is from Ross Sandler of Deutsche Bank. Your line is open.

Just had one question, Pedro. You guys didn't mention customer acquisition ramp as one of the key factors in your prepared remarks to explain the strong acceleration you are seeing, and it didn't look like it really showed up in sales and marketing expense. So was there any ramp up of online acquisitions, activity in the quarter? And then, can you just talk about the success that you are seeing preliminarily from the TV campaign thus far in 2Q, are you likely to see an even greater acceleration from here, especially as the comps get easier? Thanks guys.

So if you look at incremental registered users on a sequential basis, it actually came in fairly in line with Q4, around 4.2 million new users. In terms of the actual incremental spend, I think we tried to mention that we began to accrue the production costs of some of our off-line advertising initiatives for the year, so the actual filming of the ad spots and some of the brand redesigns that we are carrying out, and we'll have updates for those in Q2, but the campaign actually only started to air about five or six days ago, so still very early to tell whether cable television is having a direct impact or not. We'll update you on that once we announce the next quarter. And in terms of online, again overall spend still fairly in line with previous quarter and delivering fairly in line results versus Q4, which are about I think slightly less than 20% growth over the quarterly clip of new users we were doing Q1 of last year.

Thank you. Our next question in queue is from Stephen Ju of Credit Suisse. Your line is open.

Marcos, I guess this is a longer-term question, but are larger retailers' attitudes towards using MercadoPago as a payment platform materially different versus their attitudes in using their e-commerce marketplaces platform, because historically I think their willingness to use MercadoLibre as I guess a lead-gen platform was daunted by their view of you guys as a competitor, but do you think their willingness to accept MercadoPago will be greater over time? And I think, Pedro, just a follow-up on the prior ASP question, do any of your users on the platform tends to buy for instance in higher ASP categories like consumer electronics and then overtime they get comfortable buying in other categories?

Stephen, let me address the first part of your question then. We believe larger retailers overall across the world are changing their attitudes towards marketplaces and as they start to define their overall digital e-commerce sales strategies, and we are seeing increased acceptance from larger retailers, not only of MercadoPago but also of MercadoLibre as a platform where they can conduct their sales, as we have opened our platforms and are enabling larger retailers to connect to MercadoLibre as well through APIs and thereby attracting them to do their e-commerce in a way that is more convenient for them to what they are accustomed to do, and we think we'll continue to be increasingly successful at bringing larger retailers onto both MercadoLibre and MercadoPago.

And on the second question, so the data does show that overall ASPs tend to decline as users become more engaged and have more repeat usage as they begin to purchase more and more categories. Now, I think there is still room to improve that significantly because when you look at us historically, we have been significantly overweight consumer electronics, and so the supply across the board, a broader amount of categories, has been improving significantly, apparel is a testament to that, but still has room to improve. And so, in terms of category expansion and verticalization, one of our big features behind that is that we should be able to increase our share of wallet as we improved the supply, the offering, and the experience and feature set across a greater number of categories. So the answer is, yes, there is a tendency for overall ASPs to get lower among more engaged users, it's not yet a significant spread between new and existing users.

Thank you. Our next question in queue is from Marcelo Santos of JPMorgan. Your line is open.

My question is about consumer care, you mentioned that you had some advances in consumer care, I just wanted to explore that a little bit further. Have you started to notice an improvement in the way the users evaluate or how much they complain, how much they enter into those – for example consumer bureaus against MercadoLibre due to the new contact points for consumer care?

I don't think I understood the last part of your question but I think I understand the overall question, so let me take it and if there's anything missing piece, you can ask again whatever is missing. So customer service, I have spent like personally a lot of time even answering queries from users. We have done a lot of work on the backend and we are starting to see the results of that work on our users. I think we have a long way to go but we are seeing steady progress in the Net Promoter Scores and also in the contact rates. As you might know, we have enabled contact buttons all over the site, so it is much easier now to contact our customer care center, which was a common complaint, particularly in Brazil. So, obviously as we have increased this ability and the availability of the contact area, those complaints are coming down in Brazil as well. So I would say we are still in the early days, we are now in a platform and with a technology that we can move very fast, we are trying to do things that are really game-changer for the way we address our users, and we have seen progress and we expect to see much more progress in the next few years.

Okay, thank you for the first question, and my second question is about the reacceleration in Brazil. I just wanted to get a feeling of how much the marketplace reaccelerated, I mean because you had more Pago, obviously you have more financial revenues, but what about the marketplace, have you seen changes in the markets, what has been driving them, if you could just give a little bit more color?

Sure. So when we look at the underlying marketplace metrics, merchandise volume, we've seen a steady improvement in the ballpark, slightly more than 10 percentage points of additional growth versus the previous quarter. I think a lot of that is being driven by the focus on improving the user experience, shipping, customer service, all these issues we've ran through. I think in all fairness it's also important to point out that there is a somewhat easier comp than Q4 and Q3 in Brazil. The comps for Q1 and Q2 continue to be high, especially in Brazil where Q2 of last year was very strong but certainly less strong than what Q3 and Q4 were because those were related to the initial launch of the new technology. So I would say, and we tried to transmit this in the initial remarks, I think we are pleased with the momentum in the business, I think we are executing well, a lot of our strategic initiatives although still very nascent are beginning to take form, and there also is a comp issue that gets a little bit easier. All in, Brazil did a merchandise volume growth this quarter that was slightly more than 10 percentage points higher in terms of growth rate than the last quarter, so important acceleration.

Our next question in queue is from Chad Bartley of Pacific Crest. Your line is open.

Two quick questions. In the past, you have given some metrics on mobile as a percent of I believe traffic and GMV. Can you update us on that for Q1? And then also in the past, you have given us growth in your total non-marketplace revenue, I think you talked about as a percent of total revenue, but can you tell us how fast that grew in the first quarter?

So mobile is a number that we want to be as competitively cautious as we can. I think what we have indicated in general is that the mobile story for Latin America seems to be as potent or even more potent than what you are seeing in the U.S., so there is significant growth to come from mobile going forward as the installed base of smartphones, which is still fairly small, continues to grow, and more importantly, 3G, 3.5G, 4G connectivity gets rolled out throughout the region. So, we continue to see good traction. We gave a data point this quarter around percentage of users that registered from mobile devices, so signalling primarily mobile usage, which we think points out to how accretive this is, and this isn't only existing users that are now using multiple screens but actually users that perhaps weren't accessing the platform in the past, and that's really the only specific disclosure that I think we're comfortable making on an ongoing basis. And the second question, I think we pointed out in the prepared remarks, when you look at year-over-year, the adjacent businesses, so payments both off platform and the financing business, plus classifieds, plus advertising, year-over-year gained 200 basis points or 2 percentage points of mix adoption, from 28% of overall revenues to 30%. 30% is sequentially flat, so it's in line with what happened in Q4. Now bear in mind that the classifieds business, which is slightly less than half of those overall adjacencies, was significantly hit by the Venezuelan devaluation, we have a very, very strong classifieds business in Venezuela, and so that had particular impact on that business. Were it not for the devaluation on a sequential basis, the revenue percentage coming from the adjacencies would have continued to trend upwards.

So am I correct that you don't want to talk about currency neutral growth in your non-marketplace revenue, because you have done that in the past, so it sounds like you don't want to talk about that for Q1?

We did give out some numbers, so we said that classifieds and advertising grew 32% year-over-year on a currency neutral basis, despite Venezuelan devaluation. And payments revenues, which is the other important revenue stream there, combining both off platform processing fees and consumer financing fees, both on and off platform, grew 65% on a currency neutral basis.

Our next question in queue is from Dan Su of Morningstar. Your line is open.

My question is on branding and marketing investments. The management actually just touched upon that, but I am just hoping that you can expand on how you are allocating your marketing dollars, both across geographies and the splits between online and off-line? And also kind of a related question is, how do you look at the marketing ROI? Thank you.

So, lots of questions there, I'll try to take them. If I forgot one, just refresh it for me.

Sure.

So marketing spend is about 75% plus online for this year our projection, the remainder is off-line. Off-line is a combination primarily of cable TV and radio. The geographical split, by and large, is a combination of relative size, adjusted by how competitive the market is and how much TV competitors are doing. It's also tough to gauge because in the case of cable signals, in many cases you have spill-over. So you can buy feeds for a specific country and still get air time in other countries. But in general, the allocation is made roughly in line with the relative size of the businesses, with an adjustment for specific either competitive situation or tactical needs that we see as opportunities. ROI is measured, particularly the online ROI, through a multiplicity of measures, by channel, by merchandise volume, initiated revenues, there is a whole enormous scoreboard, probably not too relevant to get into here. There was one more part to the question I believe.

Yes, actually it covered the questions but I just had a related one, so is the marketing on branding of the overall MercadoLibre or is it more product-specific?

So the online marketing is obviously less brand driven and more driven on conversions, whether it'd be search advertising, which is very little brand driven and very much keyword driven, or if it is display advertising, it is also very much driven on effective CPMs and effective returns, but with a little bit more of emphasis placed perhaps on promoting a specific category or promoting specific events. The off-line campaigns are the ones that have the less specifically measurable ROIs, and they focus more on brand building and brand ubiquity. One way to sort of test the impact of the cable and the off-line branding isn't so much the immediate lift on business metrics but actually what the year-over-year evolution on brand recall and brand awareness are. So that's more traditional off-line marketing.

Our next question in queue is from Aaron Kessler of Raymond James. Your line is open.

Just a couple of questions. If you have it, can you give us maybe the unit growth by country, if you still give that out? And can you talk a little bit about maybe your vertical shopping experiences? I know you've talked a lot about retail in the past and fashion them, making (indiscernible) the progress there, and any insights into maybe additional some vertical shopping experiences?

So we haven't been disclosing per country unit growths or volume growth, so that's an easy one, and I think Marcos will take the one on vertical experiences.

On verticals, I would say that first verticals, [the run up] (ph) historically has been more towards some [real estate] (ph) where we are doing very well in (indiscernible). We basically are (indiscernible) in Latin America and we would say we have seen dramatic progress over 20 years in the number of listings that we have on our platform and we are seeing strong growth in the traffic there as well. So, we are very happy with that. In the last couple of quarters, we're very focused in apparel, we've done a lot of changes to our products to have a better navigation, better finding in apparel, we are seeing good traction, we are also talking to some branded sellers, some larger retailers, and we are very excited with the opportunities in apparel, we see apparel being a very large category in other marketplaces in the world, we think we have a big opportunity, we are doing the heavy lifting part of the job, doing product changes and talking to retailers and doing the marketing, but we think there is some great opportunity there.

Thank you. Our next question is from (indiscernible) of Morgan Stanley. Your line is open, please go ahead.

I was wondering if you could comment a little bit about what you are seeing on the macroeconomic front. Obviously you were hit by the devaluations in Venezuela and it seems like it did impact your classifieds. Is there anything else that you would flag that might have had an impact in the quartet in any of the markets?

I think we want to be consistent here. We have traditionally always answered macro questions by saying that given how early stage e-commerce is in the region, although macro obviously has to a certain degree an impact, we feel more comfortable attributing both strong quarters and weak quarters to execution and more industry-specific drivers such as broadband rollout, rollout of smartphones, price points of PCs, and whatnot. Now, there are occasions where macro shifts are significant and those are the times where we call it out. I think the case of Venezuela, from a headline and reporting angle, obviously when you have slightly less than 20% currency devaluation, that will obviously impact your reported numbers, and more importantly with the death of Chavez and then the extended electoral calendar, that really was a country that pretty much ground to a standstill for a few weeks during the quarter. But that's more of an anomaly. I think in the other markets, the combination of a conviction that execution and industry-specific drivers are still much more important than whether GDP grows 2% or 3% leads us to try to usually not explain quarters driven by macro. One comment we did make is that we see both countries that are showing strong macro performance on a relative basis and those that are obviously tougher environment to operate in, such as Venezuela and Argentina, and we see the business doing well in both extremes. Merchandise volume growth in both Argentina and Venezuela continues to be extremely high, and I think it's a testament to the resiliency of the business model. This is a business model that has historically performed on a relative basis, strongly also in tougher macro economic times, as users look to earn additional income or sell goods that they're no longer using, in harder macro times. So, again, Venezuela obviously had an impact, we called that out, but longer-term I think we're more focused on our own execution than on what's happening at a macro level.

That fair, thanks for that Pedro, and if I may ask a quick follow up on that, you showed acceleration across pretty much every metric, but by country, I think that was not the case in Mexico. I know it's a smaller market but is there anything there worth flagging or is it just the calendar effects?

No, I think that's a good point. So there is a calendar impact. Easter is typically a relevant holiday in Mexico and it got quarterly shifted this year, but I think it goes beyond that. I think Mexico for us is a market that we longer term expect more growth out of. E-commerce in Mexico is not something that's booming and it's not that from a competitive situation we see other competitors performing stronger than what we are seeing, but we do acknowledge that it is a market that underperforms what the Mexican economy is and that we hope to see an improvement in growth from. We did have a few quarters last year where it looked like it was accelerating, and this certainly wasn't the case. So I think we continue to hunker down and focus on continuing to launch MercadoPago in Mexico and drive adoption of the big countries, it's by far the one that has the lowest Pago adoption, and at one point also rolling out some of the other value-added services, like shipping and the vertical categories that are already available in Brazil, Argentina, but aren't available in Mexico yet, and hopefully that will get the Mexican growth trajectory back to where we think it should be.

Thank you. Our next question in queue is from Robert Ford of Bank of America. Your line is open.

Good afternoon everybody and congratulations on the quarter, guys. When you look at some of the traffic stats, it suggests that traffic may have dropped off a little bit in Brazil in March. Can you talk a little bit about maybe what you are doing to direct frequency of use and whether or not we're putting a right weed on some of the traffic you're seeing in Brazil?

Let me take that one. With the traffic figures, we look at – the figures I think continue to show us very strongly as a leader in Brazil. Nonetheless, traffic is just one of the many metrics that we focus on but we are happy with the way traffic is evolving in this field. On the contrary, we think we had a very strong Q1 in Brazil with acceleration of all the vibrancy metrics that we look at. But if you go into the frequency of use part of your question, clearly integrating shipping, improving payments, these are some of the key aspects that we are very focused on to deliver a better experience for buyers and for sellers and increase the repeat usage of our platform. So I would say we are very focused on integrating and providing a better payments solution, better shipping, better customer service and fraud detection, verticals, navigation, mobile navigation, all these things are the key areas that we have been focusing on for several quarters now and ones that we expect will continue to help drive our business forward and not only bring new users but increase the usage of our platform from repeat users.

And Marcos, could you give us a sense in terms of frequency, how that's evolving, you've got so many that you're working at?

It's evolving positively. So we give out the number of unique buyers once a year, but when you look at that number, you will see that the number of successful items per unique buyer is growing every year for the last nine years. So, we are not only growing the number of unique buyers every year, but we are also growing the number of transactions on a per buyer basis. So, thanks for that question, Bob, and we do have time for one more question.

Our next question in queue is from Robert Larity of Rose Advisors. Your line is open.

Asked earlier, you mentioned that GMV growth of 30% was much higher than item growth of 20% and you indicated that the reason that this happened despite the mix shift into lower ticket categories like apparel was because of local currency inflation. I was wondering if you could quantify the effect of that, and also explain why that local currency inflation is not reflected in the U.S. dollar translation.

I probably didn't answer the question very well because a lot of those concepts are short-circuited. So let me start again. The disconnect between units and local currency GMV obviously signals an increase in local currency average selling prices. Those I was saying come about on a quarterly basis as a consequence of two things, people buying more expensive items, which could drive average selling prices up, or in other cases local currency inflation in countries such as Venezuela that until the more recent devaluation have stagnant or have non-increasing exchange rates, which now with the devaluation get connected but the devaluation occurred in February. I think what I was trying to signal in terms of the mix shift is that although on a sequential basis, you could have quarters where you have increases in the mix of products being bought, longer-term as we move into an increasing number of newer categories that typically have lower ASPs than consumer electronics, the longer-term trend than the one we had been witnessing over the past few quarters longer-term, were of a decrease in ASPs, that in this particular sequential quarter actually went up as we sold more higher ticket items. And then on top of that, you have inflation where in countries like Argentina and Venezuela outpaced currency devaluation and you have stronger local currency inflation than dollar.

Does that answer your question Mr. Larity?

Yes it does.

Thank you. And with that, I am showing no further questions in queue. We'd like to conclude today's conference call and thank you ladies and gentlemen for your participation. You may now disconnect. Have a great day.