Facebook ads’ return on ad spend rose 33% year over year, while purchase rates jumped 68%.
A Forrester analyst just back from Buenos Aires reports on the hot topics among online retailers in Latin America’s third-largest economy.
I spent several days in Buenos Aires last week which was fantastic—great fun and really helpful in terms of understanding what’s happening in the e-commerce market. Wednesday was the annual E-commerce Day event: It was packed with well over a thousand people in the audience. I presented on global e-commerce trends that are set to impact the market in Argentina, and also met with a number of online retailers.
A handful of takeaways from these conversations:
E-commerce in Argentina is still at an early stage. There is tremendous interest in driving e-commerce in Argentina, but the real growth is yet to come. Today’s roughly $2 billion online retail market is dominated by MercadoLibre, with traditional retailers like Falabella, Garbarino and Walmart increasingly making the online channel a priority. Newer entrants like Dafiti are also carving out a niche in categories such as apparel.
Intra-regional cross-border e-commerce is very limited today. There was much discussion about cross-border e-commerce with China, but today little cross-border e-commerce exists within Latin America itself. Online retailers are anxious to tap into consumers in other countries in the region, but few have made concerted efforts in this area.
Most mobile initiatives are relatively new and focused exclusively on smartphones. Most online retailers’ mobile initiatives are in their infancy in Argentina. Many larger retailers are just rolling out mobile offerings (both apps and websites), and virtually all are focused on smartphones rather than tablets.
Delivery timeframes are typically in the one-week range. Unlike in Brazil where consumers in the major cities have been led to expect free one- or two-day delivery timeframes, in Argentina, online retailers don’t face the same challenge of meeting these high consumer expectations around delivery times.
Product selection is often cited as a hurdle to e-commerce. In several conversations, the issue of the limited number of brands available in the country came up as impacting the growth of e-commerce. Current import restrictions means that not all foreign brands are available, and often only a limited number of models or styles are offered. There is a sense that there will need to be a broader product selection available online in order to convince consumers to buy.
Other issues such as credit card payments also challenge e-commerce in Argentina, yet there is optimism that the opportunity is substantial and we’ve barely scratched the surface. At Forrester, we’ll be looking at this market in greater depth this fall as we update our online retail forecast for Latin America.