Why and how is e-commerce booming in Argentina? What are the business opportunities in this industry? In this article, we’re going to have a close look at this growing sector of Argentina’s economy.
With the huge e-commerce platforms of Alibaba operating mainly in Asia and Amazon operating in 13 countries, one may question why Latin America doesn’t have their own e-commerce properly sorted. There are many reasons for this, but this is changing rapidly.
The e-Commerce Industry In Argentina
The CyberMonday of at the beginning of November in Argentina stresses the relevance of this topic. The ‘BlackFriday of the web’ on the 1st of November gathered 1.1 million nationals as the website offered breathtaking discounts. At its busiest time, 50 thousand people were connected simultaneously, and a huge amount of transactions were made.
According to Worldpay’s research, e-commerce in Latin America is set to grow at a CAGR (compound annual growth rate) of 19% over the next 5 years, rising from US$59 billion to US$118 billion in 2021. This is the biggest increase of any region in the world so far.
This same research shows that the 3 countries where e-commerce is growing the fastest are precisely Argentina, Colombia and Nigeria.
And this increase was confirmed by the Argentinian Chamber of Electronic Commerce which calculated that there was an increase of 51% in e-commerce transactions in just 2016. And despite its difficult economic past, Argentina has a real chance to succeed in this sector. Furthermore, Argentina is the country which has the most smartphone users in Latin America, which also makes it possible for m-commerce to increase accordingly.
The growth is so clear that it has attracted the eye of foreign e-commerce giants. Just this past July president Mauricio Macri and Michael Punke, the vice-president of Global Public Policies of Amazon shook hands and signed a cooperation agreement. It’s official now: Amazon will be setting off a data management platform in Buenos Aires, and they are set to employ 100 workers.
Effort to Boost e-Commerce Transactions
If Argentina wants to keep up with it’s growing e-commerce industry, it has a few challenges to face. The real problem which is set to solve is that of user trust.
Indeed, many Argentinians don’t fully trust buying online and prefer to buy at their local stores. And they aren’t completely wrong, as Argentinian e-commerce still needs more investment in innovation for it to be as reliable and efficient as it is in Western countries.
When they first set off CyberMonday in Argentina, the objective was exactly that, to invite new users on the web for them to make the most of the breathtaking offers. And it worked. During CyberMonday, every 10 seconds a smartphone was sold.
Business Opportunities In Argentinian e-Commerce:
As the e-commerce is growing exponentially in Argentina, there is a whole wealth of opportunities for keen investors. As we mentioned previously, better logistics are needed for the e-commerce to function properly. These e-commerce platforms will need foreign digital expertise for their websites to make them safer for users, especially when it comes to billing and money transactions. This will only have a positive effect on demand as more and more Argentinians will gain trust in its use.
The increasing use of e-commerce in Argentina also means that anyone anywhere can sell their merchandise in the whole of Argentina through an online shopping website. These last are user-friendly and aren’t very costly. This offers great opportunities for companies that are seeking to cut down on costs as there will be no more need for physical stores anymore.
Anyhow, thanks to e-commerce, Argentinians will have access to far more foreign products in just a few clicks. If you’re thinking of setting off an e-commerce of your own in Argentina, let Biz Latin Hub assist you. With their bilingual team of lawyers and accountants, they can make it easier for you to incorporate a company and import or trade with Argentina. Doing business in Argentina is still complex and challenging for a number of reasons, which is why foreign companies often rely on companies offering back-office services. So don’t hesitate to contact Olly (here) our country coordinator in our office in Buenos Aires to see how we can help you.
Want to learn more about our services in Latin America? Check out this video.