subject: Global Online Marketing Profile 2010 Forecast - Argentina [print this page] Global Online Marketing Profile 2010 Forecast - Argentina
However, the global financial crisis coped with the decline of commodity prices has reduced its steady growth. In 2008, the GDP grew only 7%. Inflation, estimated to be around 9%, continuous to rise despite the price controls from the government.
In addition, the economic expansion has created jobs, reducing unemployment from 21 % in 2002 to 8% in 2008. The living conditions in the country have improved as well; only 20,6% of the population lives bellow the poverty line compared to over 50% at the beginning of the 2001 crisis. According to the United States Department of State, the domestic consumer expectations are on the rise. Argentine consumers are looking for better-designed and competitive priced products. The middle class has expanded, representing 40% of the population. In fact, according to Produce Marketing Association, consumers with high and middle-high incomes, represent about 10 million people from a total population of 40 million people. American exports have a great potential to be successful and lucrative in such a market. Finally the Argentina's exchange rate has been steadily increasing making American exports are more expensive than local ones.
Best Industry Segments
In 2008, imports for Argentina were estimated to be of 59.9 billions f.o.b. Its main import partners continue to be the countries within the Latin American trade block of the MERCOSUR. (Argentina, Brazil, Paraguay and Uruguay.) Brazil accounts for 34.6 % of the total imports. The US and China are importing at 12,6% and 12% respectively. China has in fact, throughout the past years, been progressively gaining market presence in Argentina.
According to the CIA Factbook, in 2008 American goods exports to Argentina accounted for 7.5 billion; they were up 28.7% from 2007. The top exports categories were Machinery ($1.9 billion, Electrical Machinery ($926 million), Mineral Fuel (oil) ($832 million), Organic Chemicals ($639 million), and Plastic ($401 million). In addition, US exports of private commercial services were up by 23,6% compared to 2006 and represented 2.8 billion.
Regulatory and Tariff Landscape
All imported goods and services in Argentina are subject to an ad valorem duty, which is based on the cost of the goods, their insurance and their freight (CIF). Other goods such as alcoholic beverages, soft drinks, syrups, extracts, concentrates and consumer electronic products are subjects to additional taxes. Depending on the imported product, there are additional fees and taxes to be paid such as a 0.5% statistical tax on the CIF value (except capital goods) and a 21% or 10.5% value added tax (VAT) on the sum of the CIF value, tariff and statistics fee. There is as well an either 10% or 5.5% advanced VAT on the sum of the CIF value for goods imported for resale and a 3% anticipated profit tax on all retail goods. Information specifying commodities subject to countervailing duties can be found at the Comisin National de Comercio Exterior website. Furthermore, the common external tariff ranges from 0%-35% (with a 13% average). According to the WTO there are some non-tariff trade barriers for exporters looking to expand to new markets. For more information on these barriers visit the WTO website. A recent study conducted by the Inter-American Development Bank said that there will be a reduction of freight cost of 10% in several Latin American countries including Argentina, this will encourage and increase trade flow between countries. In addition, the MERCOSUR standards are changing to be identical to the norms of the European Union, the United States and Codex Alimentarius. Finally, Argentina prohibits the import of certain used products such as spare parts, medical supplies, automobiles, motorcycles and velocipedes, clothing, tires, boats, products containing polychlorinated biphenyl's (PCB's), and products containing Asbestos fibers (Amphibole and Chrysotile variety). Prospective exporters should research if their product is viable for import and to what rules it is subject to. Moreover, corruption is still present in the country; exporters may be required to pay an extra cost.
Online Marketing Profile
The number of residential Internet lines in Argentina has increased by an average of 19% this past year. In fact, Argentina is one of the countries in Latin America with the largest population of Internet users: 6.6 per 100 inhabitants, which is equivalent to 20 million online users. Since Spanish is the third most spoken and searched language in the world, advertising in this language could be profitable in Argentina as well as in other Spanish speaking countries. Moreover, Argentineans prefer to conduct researches in their native language rather than in English.
Popular Argentine Search Websites
According to Searcheninewatch.com, Google Argentina continuous to be the most popular search engine. Yahoo! Argentina is second and MSN is ranked as third. There are over 19 different search engines that have different regional weight. The most popular local search engines are: terra, brujula, grippo, buscador.clarin, and uolsinectis.
Summary
Argentina's economy is currently experiencing a slower growth. Nevertheless, thanks to a change in regulations and the reduction of transportation cost, this market looks profitable for US. Exports. For a global online expansion GLOBALeMARKETER.com ranks Argentina as a Tier II market.
Xenia Kolesnikov is a Global Market Research Analyst at Global eMarketer (GeM). GeM is an international business and marketing consulting firm that helps business expand globally from preparation, to implementation through global online campaign management.
For more information, contact information[at]globalemarketer[dot]com, or visit our website at http://www.globalemarketer.com
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