That is making the e-commerce is strengthened, but the situation is uneven depending on the sector. Regarding this topic, two market leaders spoke with Ambit and revealed what is happening inside electronic commerce in the midst of the sharp drop in consumption.
Official data: a gloomy outlook for consumption
In February, the Consumption Indicator (IC) of the Argentine Chamber of Commerce and Services (CAC), which reflects the evolution of household consumption of final goods and services on a monthly basis, showed a decline of 3.5% in the year-on-year comparison. This implies a seasonally adjusted increase of 1.5% compared to the month of January, that is, discounting the usual seasonal effects of that index throughout the year.
As in January, high inflation rates continued to impact the purchasing power of people and the fall in consumption deepened by real loss of purchasing power.
Last week the National Institute of Statistics and Censuses (INDEC) released the sales indices for supermarkets, wholesalers and shopping malls for January. All indices were negative, showing the other side of the monetary squeeze: a strong recession and sudden brake on consumption.
In January, there was a sharp drop in consumption at all levels. A 13.8% drop in the total sales index at constant prices compared to January 2023 for supermarkets. Additionally, the same index for wholesale self-service stores showed a drop of 8.1% year-on-year, while for shopping centers the drop was 21.3% compared to the same month of the previous year.
These indices are added to those already reported by business entities, such as the Argentine Chamber of Medium Enterprises (CAME)which had reported a 28.5% year-on-year drop in retail sales.
Consumption: business strategies
In this context, businesses in all sectors are beginning to bet on greater extent to electronic commerce To try to lower costs and have at least two sales channels, with different promotion strategies to mitigate the impact. Although the pandemic strengthened the use of this route to attract another type of consumer, the economic situation showed the need to promote this diversification strategy.
According to information provided by TiendaNube in response to a query from this medium, from December 1, 2023 to February 29, 2024, a 19% growth in transactions vs. the December-February period of the previous year.
Regarding payment methods, TiendaNube recorded that, from March 1, 2024 to March 20, 2024, consumers financed purchases as follows:
- 61% in one payment
- 30% in 3 installments
- 8% in 6 installments
- 1% in 10 or more installments.
This data appears despite the program “Simple Fee” launched by the Government on January 25. This marks a trend in which, although rates are more competitive, consumers are changing prices. consumption habits being more selective with purchases and sticking to only what they can buy.
E-commerce: what items boost sales
One of the market leaders consulted by Ambit maintained that the items that are boosting the market the most In this difficult context are those of Clothing, Beauty and Personal Care and Food and Beverages.
Meanwhile, from the side of StoreCloud They agree that the category clothing is being promoted as is Beauty but they introduce another item, which is House and garden.
In the case of Clothing and Beauty They maintain that the greater number of promotions and special events makes it possible to find more convenient offers other than those in official brand or pharmaceutical stores, making it a more convenient option for the consumer.
“Users lean towards online commerce by factors such as its ability to offer competitive prices, by the numerous instances of discounts and promotions, and by the ease of compare prices and products. For brands, this is a great opportunity to launch their businesses with lower initial costs and gain rapid visibility“said Franco Radavero, Country Manager of Tiendanube in Argentina.
Source: Ambito
