March 1 (Reuters) - Argentine e-commerce platform MercadoLibre Inc reported a record quarterly revenue on Monday, beating estimates, yet saw profit margins shrink from heavier spending to keep up with an online shopping boom driven by the COVID-19 pandemic.

The company's gross profit margin dipped 8.9 percentage points from a year ago while costs swelled 36% due to the higher cost of goods and shipping expenses during the competitive holiday season, executives told a conference call with analysts.

Shares dipped more than 3% in after-market trading on the results. Still, revenue soared to $1.33 billion from $674.3 million a year ago, outdoing analyst estimates of $1.22 billion, according to IBES data from Refinitiv.

Speedy deliveries are a key competitive edge for e-commerce in Latin America, which still makes up a fraction of retail as MercadoLibre and its rivals, including global giant Amazon, vie for shoppers unaccustomed to spending money online.

MercadoLibre, the region's most valuable company with a market capitalization of $81.7 billion, has bet heavily on its digital payments platform, Mercado Pago.

Transactions in the fourth quarter jumped 131%, with 20 million active wallet users.

Executives said MercadoLibre plans to launch a credit card in Brazil this year and is working with PayPal on a service to accept remittances in Mexico.

In Brazil, MercadoLibre's biggest market, the firm said it will spend almost $1.8 billion this year, without disclosing other investment plans for the region.

MercadoLibre reported a quarterly net loss of $50.6 million, slightly less than a year earlier. (https://bit.ly/302znzY) It ended the year with a 12-month net loss of $700,000, compared with a net loss of nearly $172 million the year before. (Reporting by Chavi Mehta in Bengaluru and Daina Beth Solomon in Mexico City; Additional reporting by Aluisio Pereira; Editing by Amy Caren Daniel and Sonya Hepinstall)