Growth of Ecommerce in Argentina

Ecommerce in Argentina has experienced explosive growth in recent years. The pandemic accelerated digital adoption, leading more consumers to shop online. In 2023, it was estimated that more than 21 million Argentinians bought products and services online, and the trend continues to rise.

Factors driving this growth:

• Increased connectivity and internet access: With more than 80% of the population connected, consumers have access to a wide variety of products that were previously unavailable in their region.
• Proliferation of ecommerce platforms: Marketplaces such Mercado Libre, Tiendanube and Shopify have made it easier for local businesses to enter the ecommerce world with turnkey solutions.
• Customer preferences: Convenience, access to promotions, and the ability to compare prices are driving more people to opt for online shopping.

However, with the growth of ecommerce come challenges related to logistics, high inflation, and changing regulations in Argentina, forcing businesses to seek creative solutions.

International Trade and Ecommerce: Two Interrelated Paths

One of the biggest impacts of ecommerce has been how easily Argentine companies can access international markets. Today, an entrepreneur can sell products from Argentina to anywhere in the world thanks to digital platforms, removing barriers that once seemed insurmountable.

Exportations via Ecommerce

Ecommerce has enabled Argentine companies, from small ventures to large corporations, to find customers in other countries without the need for intermediaries. Sectors such as fashion, agro-industrial products, and technology goods are leveraging digital sales platforms to reach consumers in markets like the United States, Europe, and Asia.

Advantages of exporting through ecommerce::

1. Access to new markets: Geographical barriers are reduced, allowing sales to countries with higher purchasing power.
2. Flexibility and low entry costs: Online stores allow companies to test products in new markets without the need for large investments.
3. Facilidades logísticas: El auge de empresas de courier internacionales como DHL, FedEx y UPS ha mejorado la conectividad global, facilitando el envío de productos desde Argentina.

Challenges of international trade in ecommerce:

• Exchange rate: Dollar fluctuations impact costs and profit margins for exporters. The difference between the official exchange rate and the parallel dollar creates uncertainty in financial planning.
• Regulations and export costs: Argentina imposes a series of restrictions and regulations on exporting products, including permits, customs fees, delays in merchandise clearance, and taxes like export duties, all of which affect international competitiveness.
• Logistics: While platforms have improved, logistics infrastructure remains a challenge, both nationally and internationally. Shipping costs, especially for large or heavy products, can be prohibitive for small businesses.

Importations via Ecommerce

Just as ecommerce facilitates exports, it has also revolutionized how companies and Argentine consumers access international products. Global platforms like Amazon, AliExpress and eBay allow Argentine consumers to purchase foreign products relatively easily.

For businesses, ecommerce has opened opportunities to import products not manufactured locally or with growing demand, such as tech gadgets, fashion apparel, or niche products. This allows entrepreneurs to create new business lines by capitalizing on domestic demand for foreign goods.

Challenges of importing in ecommerce::

• Customs limitations and permits: Imported products are subject to customs regulations that limit the quantity and value of purchases, which can cause problems for those looking to import large quantities for resale.
• High tax burden: Customs tariffs, taxes like VAT, and various surcharges significantly increase the cost of imports, which is then passed on to the end consumer, affecting competitiveness.
• Currency restrictions: Restrictions on purchasing foreign currency and the difference between the official exchange rate and the parallel dollar also play a crucial role, as importing companies must deal with constant changes in the regulations set by the Central Bank and the tax authority (AFIP).

Future opportunities

Despite the challenges, both ecommerce and international trade in Argentina present unique opportunities. Companies that manage to navigate this dynamic and complex environment, quickly adapting to regulatory changes and optimizing their logistics processes, will be well-positioned to capitalize on growth.

Some trends to keep in mind:

• New ecommerce platforms focused on exports: New tech solutions are expected to emerge, further facilitating product exports with tools that simplify the management of international payments and customs procedures.
• Rise of local products in the global market: Argentine products like wines, olive oil, and fruit-based products have high demand abroad, and ecommerce allows SMEs to reach consumers interested in high-quality, certified-origin products.
• Diversification of markets: Argentine companies can start looking toward emerging markets like Asia and the Middle East, where demand for imported products, particularly from the agro-food sector, is growing.