What is the Biggest Challenge of E-commerce in Argentina?
Over the next four (3) years, the e-commerce in Argentina will continue to be one of the main contributors in the biggest increase of e-commerce in the region of Latin America. According to Worldpay’s research last October 2017, the region’s e-commerce is set to grow at a CAGR (compound annual growth rate) of 19%, surging from $59 billion USD, to $118 billion USD in 2021. The said research also shows that along with Argentina, Colombia and Nigeria have the fastest growing e-commerce. Despite its difficult economic past, the e-commerce in Argentina has a real chance to succeed with it being the country in Latin America with the largest amount of smartphone users. The Argentinian Chamber of Electronic Commerce affirmed that there was a 51% increase in the e-commerce transactions in just 2016, and that it is possible that it will increase accordingly. Another evidence of this growth is the 1.1 million mobile users that gathered online to enjoy the country’s CyberMonday, with over 50 thousand people connected simultaneously. The growth of e-commerce in Argentina is so evident that even the president and vice-president of Global Public Policies of Amazon, Mauricio Macri and Michael Punke, respectively, took notice. Amazon has now set off a data management platform in Buenos Aires that are set to employ 100 workers.
However, the biggest challenge that the e-commerce in Argentina has to face is that of user trust. Since cyber crimes are still prominent, Argentinians don’t fully trust in buying online and would still prefer buying in a physical store. Some may say that to some extent, they do not feel safe in providing important information such as credit or debit card numbers since they might become a victim of said crimes. That is why in order to keep up with it’s growing economy, the e-commerce in Argentina needs more investment in innovation to be as trustworthy and efficient as it is in Western countries.
On a positive note, this will be a great opportunity for foreign investors since the platforms of e-commerce in Argentina will need a foreign digital expertise. Better logistics are needed for websites to function properly especially when it comes to billing and money transactions, which will eventually have a positive effect on the demand and use, since consumers from Argentina will now be able to trust the platform. With trust and positive feedback from other users, more people will be encouraged to join in utilizing the e-commerce in Argentina. A great example for this is CyberMonday, which aimed to do just that – invite new users for them to make the most out of the breathtaking discounts the site has to offer. As stated earlier, this event worked with a smartphone being sold every 10 seconds.
With the increasing use of e-commerce in Argentina, businesses that are seeking to cut down costs will be able to do so since there will be no need for a physical store. Anyone can sell their merchandise anywhere, and with a few simple clicks, Argentinians can buy whatever they want or whatever they need, wherever they may be.