VERDICT – Over the last year, Argentina’s economy has weathered endless economic and political storms, but e-commerce has defied all expectations.
After a year of hardship, which included a severe drought, the ripple effects from the US Federal Reserve rate hikes, the crash of the national currency and political mishaps, the Argentine economy is deeply in recession.
No let up is expected until the second quarter of 2019 when the government hopes a strong recovery will take hold. But rising unemployment and high inflation remain serious threats to that rosy outlook.
Despite this gloomy backdrop, e-commerce in Argentina is expected to grow at a fast pace if it can continue to benefit from new disruptive trends, such as increased use of artificial intelligence, product search by voice, use of social networks and the application of technology to reduce delivery times. This is particularly so if shoppers displaying the new buying habits and preferences are to be conquered.
According to Worldpay, the market is expected to increase by 83% between 2018 and 2022.
Argentina e-commerce market helped by mobile purchases
Despite a difficult year for overall consumption spending in Argentina, last year online sales continued to show signs of further consolidation and growth, in line with technological development.
According to the data from the Argentine Chamber of Electronic Commerce (Cace), e-commerce in the country grew by 47% in 2018, to reach 229.8 billion Argentinian pesos ($8.2 billion).
During 2018, 120 million products were sold online, 25% more than in 2017. These were purchased through 79 million online checkouts,- 32% more than the previous year.
The average purchase amount was $103.1 and the most popular shopping categories were food and beverages, household items and clothing (sports and non-sports).
There is a growing trend for mobile purchases. In 2018, about 45% of shoppers used their mobile device to search for the desired product. This represents a 6% increase compared to last year. Although credit cards remain the dominant payment method, preferred by 78% users (versus 92% in 2017), the use of debit cards is gaining ground.
Point-of-sale pick-up location preferred over deliveries
In terms of logistics and delivery, the home delivery share fell in 2018 to 39%, from 47% in 2017. The new delivery option to a pick-up location (kiosks, newspaper stands, cafés, etc.) represented 1% and express delivery (by bus or by plane) terminal-to-terminal, also accounted for 1%.
The point-of-sale pick-up was the predominant option in 2018 and grew by 4% to reach 54%. Lower interest in deliveries may be due to the fact that deliveries usually take 7 days from when the purchase is made.
The trend is influenced by where growth is occurring in e-commerce. Fastest growing product categories in 2018 included: children (82% growth), cosmetics and perfumery (72%), building materials (68%), foods. drinks and cleaning supplies (63%) and sports (52%).
The category with the highest turnover was ticket and tourism, which reached the figure of $2.2 billion.