Contxto – E-commerce giant Mercado Libre is returning to its roots, literally. This week it stated it would launch a specialized platform for users in Argentina to buy or sell supplies, tools, and even machinery for agriculture.
For Mercado Libre, this maneuver means connecting small and medium-sized vendors with growers, while also riding that Covid-induced e-commerce wave.
With this platform, the company’s initial focus will be within its native Argentina. However Mercado Libre doesn’t discard eventually launching it into the other markets in which it operates.
Mercado Libre’s bet on agriculture
Bringing more agribusiness goodies onto its platform pits Mercado Libre in direct competition with fellow Argentine marketplace, Agrofy, who specializes in all things agriculture.
But it makes one wonder, who will fare better? The big name company or a startup that has more in-depth knowledge on “the field”?
Either way, it’s good news for small vendors as a reported 50 percent of these sellers are in Buenos Aires while farmers are distributed across the country. So the marketplace will at least expand their presence and provide the logistical support for deliveries in supplies.
However machinery deliveries shall have to be arranged directly between the supplier, buyer, and a third party logistics operator.
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Agtech in Argentina
Argentina is fertile ground for agtechs and startups in agribusiness.
For one, agriculture accounted for 7.2 percent of the country’s GDP in 2019. In proportional terms, this number ousts even Brazil who stands at 4.4 percent. This also illustrates why the government in Buenos Aires is vested in seeing its fields and farmers prosper.
Correspondingly, authorities play a big role in promoting agtechs.
Interestingly enough, adversity within the Argentine economy also incentivizes farmers to be more open to tech, according to one expert.
“Argentina has strength in needing to be innovative across their businesses to combat inflation and other challenges, thus they look to adopt best technologies,” says Aaron Magenheim Founder of consulting firm AgTech Insight.
“When markets are bad, Argentine growers innovate and open their wallets to double down, in stark comparison to US farmers who close their checkbooks and hope to save money and wait it out.”
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