What responds to the growth of ecommerce in Argentina?
“The slowdown in the growth of ecommerce in the world is mainly due to the post-pandemic. Added to this is the global supply chain crisis that affects the availability of products, something that also impacts Argentina. But the opportunity to win is still greater than the obstacles and the Argentine entrepreneur seeks it to overcome difficulties “points Franco Radavero, Country Manager of storecloud in Argentina.
Another factor of the Argentine market also stands out: “There is a lot of local production. One in three Tiendanube entrepreneurs manufactures 100% of the product or does so in nearby workshops. Few import the complete product. The local component helps keep the wheel turning.”
The ecommerce platform worked in 2022 with more than 45 thousand brands that billed $117,240 million, more than $321 million per day. In addition, last year they recorded a 10% more sales than in 2021 with 11 million transactions made. The average ticket was $10,366 and operations were dominated by clothing, accessories, and health and beauty.
The expectation is that this growth trend in the Argentine market continues: according to data from Statista, the Local ecommerce will grow at an average rate of 20% until 2025, a rate similar to that of Brazil and higher than expected in markets such as Russia, the United States, India, Mexico or Japan. The global average for the same period is 11.35%.
Competitive advantages of Argentina
Asked about the factors that feed these projections, Radavero points out that “Argentina is fertile landl” and lists the following reasons for these expectations:
- The good penetration of the internet and smartphones.
- The good level of banking and access to cards.
- Logistics development.
On bankarizationmakes a special mention for technology companies dedicated to financial inclusion such as fintech “Who work to close the gap in access to banking with applications to pay and collect digitally. We developed Pagonube to have a proposal integrated with the store and at a lower cost for merchants.”
However, there is still a way to go in the digitization of payments given that “The use of digital wallets grew and represents more than what was paid with debitalthough the credit card still dominates and payment in cash or through transfers continues with a sustained trend”.
Credit cards represented 63.2% of consumptionwhile 21.5% were through personalized payments, 6% through money in accounts and 5.8% with debit cards.
Another change that Tiendanube noticed throughout 2022 was the exponential growth in sales through cell phones. Among the possible causes, one prevails: the use of social networks. “76% of sales were cell phones, more than half comes from social networks. They are a great sales driver and for brands they are channels to connect with audiences,” explains Radavero.
Yes ok instagram is positioned as the big winner, since it explains the 88% of sales Through social networks, Tik Tok It is gaining ground as a channel for advertising, although it shows other characteristics: “There you are more likely to buy products recommended by influencers.”
From the company, some characteristics of the Argentine consumer stand out, such as the avidity for the use of technology, the early adoption of it and the habit of purchasing through applications.
New sectors in ecommerce
Radavero particularly highlights the effect that the pandemic had on sectors that traditionally did not turn to electronic commerce and decided to open that channel during the sanitary restrictions. “This exposed e-commerce to people who took longer to get on board and brands who were more reluctant, and in the pandemic they found that it was a viable and profitable alternative channel”he pointed.
Among the notable sectors that approached the online channel are fishmongers, stockyards, hardware stores, as well as household items and clothing. To a large extent, a factor that fuels its permanence in the digital channel is the scope: “They discovered that they can expand your audiences. What they thought was a local on the street, can now cross those borders. For example, some stores on Avellaneda street (in the Buenos Aires neighborhood of Flores), brands that historically belonged to people who had a store and went to buy. Today those stores created brands in Tiendanube and sell throughout the country. That also generated a change in the face-to-face business. They also earn margin with access to retail”.
Tips for entrepreneurs
Not everyone starts a startup with enough resources to launch elaborate campaigns or make deals with influencers. But for Radavero this is not necessarily an impediment and he recommends three actions that can be taken.
- Humanize the brand: building a brand close to the audience can be a great resource for small companies and entrepreneurs.
- Segment: Spend time defining the audience, who the product is for.
- Social Media Advertising: once the segmentation of the audience is done, investing in social networks makes sense. “Invest between 10 or 15% of the turnover, which is usual, if you did not do the first two steps, you are throwing money away. The networks allow you to be very specific to segment your audience and a small investment generates returns in a short time”.
Trends
Another of the changes that they detected in recent times is a greater demand for b-companiesthat is, companies seeking to measure its social and environmental impact and they assume commitments in that sense. “We see more products related to personal care, healthy eating. And the other side is where all these products come from: foods that are organic or not, biodegradable products. Consumers are paying attention to this, more and more B companies show their audiences with less impact, a responsible sourcing of raw materials, and the consumer values it, tends to a more responsible purchase”.
“There are several brands that we have that work on inclusion from the product, large sizes, designs without associated gender, breaking the molds of women’s or men’s clothing. There we see more entrepreneurs working on that. In addition, these brands allow people who were left out of the traditional market to find responsible proposals ”, she adds.
Challenges 2023
From Tiendanube they emphasize that They project 20% annual growth and assure that “it is a good estimate”. “We are focused on continuing to reach new entrepreneurs and new brands.”
They add a new unit that they are developing: “We want to reach SMEs, also target more complex or medium-sized companies who sell online but want a quantitative leap”.
Finally, another of the objectives for next year is to focus on the development of a virtual payment solution (Pagonube)
Source: Ambito
