This article is the third installment of the analysis of the Latin American e-commerce market: the headquarters of Latin American e-commerce giants gathered in Argentina.

Market Overview

Argentina Population: 45.98 million

Internet Penetration: 83%

E-commerce User Penetration: 58.6%

Average Revenue per User: $417.70

Argentina is the 3rd largest in Latin America and 29th largest in the world. e-commerce market, with revenues of $7.0 billion in 2021, the e-commerce market is expected to reach $11.27 billion in 2022 and $19.81 billion in 2025. The annual revenue CAGR (CAGR 2022-2025) from 2022 to 2025 is expected to be 20.69%, which is a huge growth potential.

According to the Argentine Chamber of E-Commerce (CACE) 90% of Argentine adult internet users have experience shopping online, with the number of users expected to reach 29.2 million by 2025.

Consumer Characteristics

Argentina's population is predominantly urban, with 92.1% of Argentines living in cities, with the 10 largest metropolitan areas accounting for almost half of the population, and the majority of Argentinean eCommerce buyers residing in the densely populated Autonomous City of Buenos Aires.

Argentina's main online buyers are between the ages of 25-34, with 50.6% female and 49.4% male.

Argentina has the highest percentage of Internet users in Latin America, with nearly 60% of the Argentine population accessing the Internet on mobile devices, and Internet shopping is no exception. By the end of 2021, 52% of e-commerce purchases in Argentina will be made using a mobile device, while 48% will be made using a desktop computer.

Consumer preferences in Argentina tend to be closer to those of European countries than those of other neighboring countries, and consumer income levels are relatively high. However, given the several crises that the country has experienced over the past two decades, Argentine consumers are becoming more frugal and preferring value-for-money products that offer better value for money. Argentine consumers have become more conservative and rational in their approach to shopping, buying only what is necessary and prioritizing price. This has also led to a higher acceptance of new brands at relatively low prices, rather than blindly pursuing big names and well-known brands.

In addition to price, product quality and reputation are also key considerations for Argentine consumers when shopping online. In a consumer survey, 35% of respondents decided to buy a new brand just because they heard good reviews about it, while 57% would base their judgment on a combination of quality and price.

Key Players

According to the Ecommerce DB survey, the top three online stores in the Argentine e-commerce market in terms of net e-commerce sales in 2021 are carrefour.com.ar Carrefour, with annual revenues of $286 million; adidas.com. ar Adidas, with $250 million in revenue, and walmart.com.ar Walmart, with $193 million in revenue. These top three stores account for 10% of Argentina's online revenue in 2021.

avenida.com is one of the fastest-growing stores in the Argentine market, with the store realizing sales of approximately $200,000 in 2021, a 249% increase year-over-year.

In terms of website user visits in April 2022, mercadolibre.com.ar (mercadolibre Argentina) was ranked #1, followed by mercadolibre.com and fravega.comfravega.com ranked #2 and #3, and amazon.com was ranked #4. carrefour.com.ar ranked fifth.

Mercado was founded in 1999 in Uruguay, and its headquarters are set up in Argentina oh.

Category Preferences

Electronics and Media is the largest segment in Argentina, accounting for 30% of Argentina's e-commerce revenue. It is closely followed by Fashion at 25%; Furniture & Appliances at 16%; Toys, Hobbies & DIY at 16%; and Food & Personal Care at 12%.

Payment Preferences

According to the AMI survey, the most common payment methods for e-commerce purchases in Argentina in 2021 are:

*UseePay cross-border payments can help merchants integrate the must-have payment methods for the Argentine marketplace in one stop, contact www.useepay.com for more details.

For the Argentine market, there is an additional challenge in payments: credit card fraud. While the risk of fraud is a global phenomenon, it is more prevalent in developing markets in Latin America, where, according to Visa, the international credit card organization, nearly 7% of orders are declined due to suspected fraud (compared to about 3% in the U.S. and Canada).

The high incidence of credit card fraud can make consumers feel insecure about having their credit cards stolen during online purchases, and puts merchants at risk for high-frequency chargebacks and reputational damage to their brands.

Online shoppers in Argentina expect e-commerce merchants to protect them from fraud. As a result, offshore businesses can partner with payment companies that have excellent risk management capabilities to strengthen site security measures and give consumers the confidence to shop online more frequently.

UseePay has its own self-developed Useeshield risk control system, which utilizes artificial intelligence and big data analytics to conduct rigorous checks after orders are generated, and combines a common model for risk control with industry-specific risk control rule sets to minimize false positives while intercepting fraudulent orders.

Social Media Preferences

In January 2022 data, Argentina had 39.55 million social media users, equivalent to 86.3% of the total population. Social media users are also growing at a significant rate, with Kepios analytics showing an increase of 3.6 million social media users in Argentina from 2021 to 2022.

Of the major social media outlets, YouTube has the largest number of users. An update of Google AdSource shows that at the beginning of 2022, YouTube has 31.7 million users in Argentina, which means that YouTube's advertising reach is equivalent to 69.2% of the total population of Argentina at the beginning of the year, of which 51.8% are women and 48.2% are men.

Additionally, Argentina's social e-commerce industry is growing rapidly, with the market projected to reach $1,436.8 million by the end of 2022, growing at a CAGR of 32.9%. While the majority of online shoppers still prefer to purchase products through e-commerce platforms, the popularity of the social e-commerce business model is rising in the country and is a trend that sellers should pay attention to.

Logistics Issues

Logistics is the biggest obstacle to Argentina's emergence as an ecommerce leader in Latin America. Due to the underdevelopment of local railroads, the poor quality of roads in various city neighborhoods, the confusing address system of logistics companies, the lack of zip codes, etc., and the imperfect GPS maps have led to a relatively backward level of logistics delivery. And because of the remote geographic location causes cross-border logistics obstacles, fast delivery difficulties.

But in recent years, Argentina's logistics system in the delivery of time efficiency has improved substantially, the current nationwide delivery time limit of no more than a week. As far as cross-border e-commerce is concerned, it is still dominated by postal parcels of low value and light small pieces, with a delivery timeframe of between 20-40 days. For some slightly higher-value products, cross-border sellers usually choose special lines for commercial clearance, and the delivery time limit is generally 7-14 days. The overseas warehouse business in Argentina is still in a state of pending development at this stage and is not mature enough.

Summary

Finally, for cross-border e-commerce merchants, Argentina is a huge and active blue ocean consumer market that is well worth considering the layout. Here's a bit of advice for entering the Argentine market: Completely localize!

This includes language localization of the website/store, localized marketing, product sizes and currency conversions, local payment methods, local shipping options, product restrictions, taxes and tariffs, legal and local compliance, and more.