The Argentinian-German Chamber of Commerce – I was very pleased about the fact that el Senior Federico Thielemann – Director Comercio Exterior y Sustentabilidad (foreign trade and sustainability) welcomed me in the 23rd level in the heart of Buenos Aires' Downtown area. After a short introduction about the background of our whole project he started to present a comprehensive overview about the Argentinian economy, the public affairs which companies need to handle if they are interested in setting up business in or with Argentina.
General Country Overview
Argentina is more or less a stable region without any bigger conflicts which might interfere business opportunities in any way. The whole so called MERCOSUR region (Mercado Común del Sur )is democratic. But Argentina is facing a rising criminality as well as any other country in South America – esp. in bigger cities like Buenos Aires.
The gaming rules for legal and business regulations are changing constantly and with short public announcement beforehand.
Reasons are one on side the consequences of the worst business crisis Argentina ever had in 2001 and the way the current government handles necessary issues to set up a stable strategy for future growth.
One example is the so called “not-automatic-license” which was even mentioned by el Senior Craviotto from Sixt a week ago. Most goods get an “automatic” import license under normal conditions and therefore companies are able to exchange goods between their own country and Argentina very fast and efficient. Now custom has to confirm separately every good if it belongs to special categories. This induces time delays of at least 60-90 days. Companies need immediately adapt their processes and change their plannings.
Competitor / Neigbhour countries.
One of the big questions of course is the connection to one of their big neighbors Brazil. It is well known that Brazil is one of the Top spots in South America since a couple of years. I mean the SAP interview is confirming this also out of a company perspective.
I was surprised to hear that Argentina exports 1/3 of their whole goods to Brazil. Both countries do not just act as competitors in terms of investment location for European countries. They also act as valued business partners next to each other.
Regulations in both countries are completely different. Inflation is a big topic in Brazil. They act very strict in terms of tax regulation, working laws and any other public regulation which seems to be necessary for a balanced budget No VAT (Value added taxes) is existing in Brazil. Each federation defines their taxes and the government itself has almost no own tax receips.
Argentina seems to behave and to act far more European which has probably also a lot to do with the history. Tax receips get collected by the government. VAT and income taxes are existing. Federations within the country are not charging a lot additional.
At the moment the government utter far more money in the system as it might be necessary or useful. Therefore consumption is rising up but necessary invests in companies, locations for manufacturing etc is not growing in the same way. Market entry for European companies seem to be a bit easier in Argentina because the system in general is not that much different to the one most European countries follow.
Branches / Sectors
So far there are already a couple of sectors where quite a lot German companies already invest in Argentina– either as production sector or via selling their products here locally.
As example are named car industry, renewable-energy-sector, food, all kind of TÜV certifications and others.
It might be interesting for this project to get a better estimation how the telecommunication sector is developed here. Finally online marketing is only possible due to all companies which act as supplier in this sector. TK is one of the most booming sectors in Argentina. It is estimated that more mobile phones than inhabitant exists. Fibre optic cable is established almost everywhere already. The sector itself is not regulated by the government anymore so every company can enter the market. One main target is to offer free Wifi in bigger cities. There is a project running that every suburb of Buenos Aires gets their own free Wifi system and inhabitants can use it without any additional costs than usual.
Many software companies in Europe and US employ Argentinian programmers in the to prepare their software codes. The education is on a very high standard and the loans are still lower than abroad.
Online usage from companies and inhabitants in general
The internet usage in general is increasing a lot and companies start to offer their products also via the online channel for sale. People get more and more used to order their products via internet. The growth itself could even be stronger already if you regard the requisites. But there is still a huge fear within the society that their payment data could been used by someone else. Trust doesn't appear from one moment to the next of course. People who have buying power are mainly in an age where Internet is still recognized as a “New medium”. But this doesn't really differ a lot to Germany I personally think.
Sectors which have already strong in online sales reputation are mainly ticketing, household appliances, gifts for weddings or other events, books (not amazon) and even supermarket chains with food and other range of goods (see the pictures in the galery)
Almost every company is setting up facebook sites to get connected to their current or future customers. Communication via social networks seeems to be far more common than selling products via internet. The whole discussion about “how many personal data do I offer via Facebook?” is not the central discussion here. Governmental sectors advertise their facebook site instead of their official website. This was something I was really wondering about.
SEO optimization gets more and more a topic for companies as the online competition is rising up. SEM activities are not that common so far but I am sure this will change a lot in the next couple of years or probably even earlier. So far the expert knowledge about this sector is not widely spread. Next to these developments the mobile channel is rising up as well. Smartphones are getting affordable and therefore people want to get information where ever they are and whatever they do. With the information I got and the own experience I collected in the meantime Argentina and Germany are not that far from each other in terms of using internet more and more as a sales channel. Argentinians are offering far more easier their personal data in Facebook than their credit card number on a website. This might differentiate a bit with the whole data discussion we face in Germany.
It was an impressive meeting I had with el Senor Thielemann and I got an impressive overview what really matters here in Argentina for companies, for the government, for inhabitants and how it all gets connected somehow. As mentioned earlier communication – offline and online - and setting up a functionally effectictive network– seems to be the main key factor in acting successfully on long term base here.
@Senior Thielemann: Thanks a lot for your time and openness within our meeting!
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