Electronics and Appliance Specialist Retailers in Argentina

PROSPECTS

Due to the football world cup TV sales exploded

In a country such as Argentina, where football has a fundamental place in society, an event such as the FIFA World Cup in Russia generated large sales of televisions. Much of the evolution of electronics and appliance specialist retailers in 2018 was linked with this particular event.

Inflow of imported products

One of the key differences between the current government and the previous one has been the opening up of Argentina to imports once again. The previous government had the dual objective of preventing the departure of foreign currency and protecting national industries, thus entry of imported products was largely banned, which encouraged local production of household appliances generating large growth for many companies, with the creation of many jobs and strong development in the province of Tierra del Fuego, where a large number of these appliances were assembled.

High interest rates and limited financing impact electronics and appliance specialist retailers

In a difficult economic scenario such as the one Argentina experienced in 2018, one of the main factors used to boost consumption that was dramatically reduced was the possibility of financing purchases. Due to the dollar’s sharp increase, the government raised the interest rate reaching almost 70% with the objective that large investors hold on to their pesos and do not continue buying dollars, thus maintaining the former’s value.

COMPETITIVE LANDSCAPE

Garbarino remains category leader

Despite being the second player by number of branches, Garbarino is the leader in electronics and appliance specialist retailers. With 176 outlets mainly distributed in the City of Buenos Aires and the Province of Buenos Aires, and a large number of openings in 2018, the chain manages to be the largest by value sales in this channel.

Online sales still being strongly developed

Online sales maintained strong growth in the channel due to the efforts that the main chains are making throughout the year. The use of the main players’ apps is also having more importance because consumers can undertake the entire purchase process on their smart device.

Fewer players, greater concentration of large chains

One of the characteristics of this channel as a consequence of the considerable investments required, and the lower possibility of financing, is that the market tends towards greater concentration with a smaller number of players of larger size with a large number of branches. Unlike the small players who have one or just a few branches, the large chains are the ones that can offer the best prices to consumers, adjusting their profit margins and even offering consumers the possibility of financing purchases, something that a small player cannot offer.

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