If your small business wants to expand its e-commerce offerings to the world, plan to approach the process methodically and strategically. That means entering the leading regional markets in a new continent is especially important. If you’re thinking about selling in South America, doing business in Argentina should be a top consideration.
With a large population of potential digital consumers, Argentina offers a viable audience for many e-commerce businesses. With the right approach to localization and key alliances in the Argentine business sector, you can make an impact in this progressive nation, and potentially beyond.
According to the Department of Commerce, Argentina has a powerful industrial base and is Latin America’s third-largest economy. Its population of 44 million is largely concentrated in the cities, especially the capital region around Buenos Aires. In total, 92% of residents live in urban spaces. The DOC noted that despite periods of unrest stretching back to the middle of the 20th century, today’s Argentine workforce is talent-rich and well-educated. When you expand your e-commerce business to Argentina, these well-compensated, city-dwelling workers are your potential audience.
The World Bank reports that the GDP of Argentina was $518.475 billion, placing the Argentine population in the high-income category. The financial organization’s Ease of Doing Business 2019 score shows Argentina is roughly on par with its neighboring countries. The average score for the Latin America and Caribbean region is 58.97—Argentina comes in at 58.80. The trading across borders component of overall Ease of Doing Business score comes in at 65.36, holding steady from 2018.
There are several large and thriving industry sectors within Argentina that draw attention and investment from around the world. According to the DOC, the country’s rich reserves of natural resources make it a key producer of energy. Production isn’t limited to fossil fuels—environmentally environmentally conscious parts of the energy sector such as solar power and wind are also active in Argentina. Some of the country’s major industries include:
- Energy production
- Health care
- Information technology
A large amount of Argentina’s trade with the U.S. centers around agriculture-related products. The DOC noted that Argentine companies import everything from aircraft and fuel to industrial chemicals and computers. Businesses in Argentina produce products such as wine and fruit juice for export, along with crude oil and raw materials such as aluminum. This two-way trade generates funds that pour back into consumer purchasing.
The Argentine population, with more than nine-tenths of individuals living in or near cities, is well-connected to the internet. The fact that there are so many digital shoppers present in the country demonstrates the value of using Argentina as your South American e-commerce entry point. Many Argentine buyers have moved from exclusively shopping on PCs to also using smartphones regularly, which means you should ensure your digital storefront is compatible with mobile devices.
The DOC notes that the income distribution gap in Argentina is closer than in many of its neighboring South American countries. The country has a thriving middle class, and the individuals who make up that income stratum are ready and willing to shop for consumer goods from U.S. e-commerce merchandisers. Add e-commerce to a healthy import-export relationship that is heating up, and you have the potential to trade with the very fruitful Argentine market.
The DOC noted that following 12 years of populist governments that limited U.S. investment in Argentina, a 2015 leadership change brought about a new rise in mutual trade. As of 2017, Argentina received $11.5 billion dollars of overseas investment demonstrating an openness to trade. That year, the U.S. sold $17.8 billion worth of goods in Argentina, and received $7.1 billion in return.
Despite many years of relative inactivity on the trade and investment fronts, the DOC reported that U.S. companies are currently well-liked by Argentine businesses. American companies are largely regarded as possessing acceptable practices and transparency, as well as product quality, service and corporate responsibility. Your organization can potentially benefit from this perception as you build your relationships with local businesspeople and consumers.
Doing Business in Argentina
The effectiveness of your business in the Argentine market may largely depend upon agreements with local companies, especially at first. When it comes time to take meetings with potential partners, you should pay attention to the personal relationships underlying your business deals, according to the DOC. Rather than rushing into contracts and agreements, you should be willing to take things slowly and develop a rapport. Once you secure a meeting, dress formally and extend handshakes to everyone present as a point of courtesy.
Business cards are useful to have on hand in Argentina, and it helps if the cards have information in Spanish. When establishing business relationships in Argentina, you may be able to secure help from the government. The U.S. embassy may also offer to make a connection between U.S. and Argentine businesspeople. Once you connect, you should remember that in South America, you aren’t “American” but rather “North American.”