Argentina has traditionally been the most sophisticated Latin American country in terms of internet usage. Its consumers are tech-savvy, and years of instability have trained them to get what they want. Argentina is also an amazing producer of entrepreneurs, with a disproportionately large amount of Latin America’s startups coming out of that country. Just to mention a few cases, MercadoLibre (the largest e-commerce company in Latin America), Despegar.com (the largest online travel agency in the region), Globant (software) and Satellogic (a world pioneer in nano-satellites) all started in Argentina.
Just four years ago, Argentina was second only to Brazil as a market for cross-border merchants in Latin America. Unfortunately, capital controls, tight customs regulations and other barriers have made life very difficult for Argentineans, leaving the country behind smaller ones such as Colombia or Chile.
Why Are E-Commerce Sales In Argentina So Low?
To understand the situation, consider the case of Ana, a 35-year-old resident of Buenos Aires. Ana used to buy from DealExtreme, a popular Chinese website where you can buy cheap goods. She got an international credit card just for that purpose.
Then, a few years ago, payments started to fail. The same transaction would be successful one day and fail the next day. Rumors said that the central bank would block cross-border credit card transactions when reserves were low. It was bothersome, but Ana kept buying. This meant retrying every day and checking online forums for the newest ways around the hurdles. …