Electronics and Appliance Specialist Retailers in Argentina

2020 IMPACT

Despite the boom in e-commerce in 2020, electronics and appliance specialist retailer outlets see extensive decline

The growth of e-commerce in electronics and appliance specialist retailers was very strong in 2020, since many retailers in this category were forced to close their doors as they are usually located in shopping malls that remained closed with no opening date in sight. In addition, e-commerce offers unapparelled convenience and was valued by consumers seeking to limit face-to-face shopping experiences and thereby reduce the risk of contracting the virus.

Problems with imports and supply chains see prices increase substantially in 2020

During the pandemic, there was a decrease in stocks of electronic appliances as a result of domestic factory closures and difficulties in importing materials, which made it difficult to maintain supplies of products such as tablets, cell phones and computers. This led to price increases of up to 100% in some cases, as many household and electronic appliances are now imported following changes in government policy in recent years.

Garbarino leverages its large network of outlets to retain pole position

Garbarino maintained its lead in electronics and appliance specialist retailers in 2020 and saw an increase in current value share. With 200 outlets mainly distributed in the City of Buenos Aires and the Province of Buenos Aires, as well as many openings in recent years, the chain continues to expand and lead overall value sales at a faster pace than its rivals Frávega and Entertainment Depot.

RECOVERY AND OPPORTUNITIES

Supply problems and a decline in retail outlets present a gloomy outlook for electronics and appliance specialist retailers

In 2021, it is expected that electronics and appliance products will continue to see supply problems as a result of the Argentine government's desire to avoid the outflow of dollars from the country. While many domestic factories currently produce home appliances, they all require imported components, and this is likely to impact the prices of popular products such as phones, tablets and PCs across the forecast period.

Online channels will continue to appeal to Argentinians in the future

A large percentage of both electronics and appliances will continue to be sold online, as this channel offers consumers special prices that cannot be found in physical stores. Greater numbers of local consumers are now used to carrying out online research before buying products in this category, with online channels typically offering more attractive deals and promotional offers that will continue to appeal to consumers whose budgets have become more limited in the wake of the pandemic.

Sales will be limited by high interest and limited financing

In such a challenging economic climate, one of the main factors used to boost consumption is the possibility of financing purchases. Due to the sharp rise in the dollar, the government recently increased interest rates to almost 70% to encourage large investors to hold on to their pesos and avoid buying dollars in an effort to maintain the former’s value.