Although Buenos Aires is a gorgeous, vibrant city filled with beautiful people and history, it is not a good market for Ocho’s products, or any chocolate company for that matter.
Buenos Aires’ population is much bigger than New Zealand’s population, and even though entering this market would significantly expand the number of customers Ocho has access to, due to differences in their social and cultural norms, and the popularity of their national dish ‘dulce de leche’ chocolate just isn’t a want or need for the Buenos Aires market.
You can buy blocks of chocolate from the supermarket in Buenos Aires but the locals tend not to. If the locals are going to buy chocolate, it would usually be from a chocolatier. Most chocolatiers in Buenos Aires mainly offer chocolate in two forms, neither of which are blocks or bars. Almost all of Ocho’s product offerings are blocks/bars of chocolate.
Argentina’s economy is stuck in recession, last year they had an inflation rate of 53% and their peso (local currency) has lost two thirds of its value since 2018.
Lack of transparency and government stability adds to business uncertainty, and Argentina has an extremely unstable, untransparent government. Argentina is also not geographically close to New Zealand, at all, and we do not have a free trade agreement with them.
Ocho would have to customise their products to some extent if they wanted to enter the Buenos Aires market. All importers must request approval from Argentine authorities before they can import any product and this can be a long process and they
Alternatively, if Ocho still wants to take the risk and enter the Buenos Aires market, I would recommend that they start by exporting to distributors specifically in Palermo Viejo. This strategy, however, would mean that Ocho would not be able to build a strong business relationship with their customers, which is something that Argenites value.
As mentioned earlier, Palermo Viejo is one of the many districts within Buenos Aires and is a neighbourhood filled with classy boutiques and designer stores, where everything is cool and trendy. Where people like to look good, like to have luxury items and like to show them off.
If Ocho’s products sell successfully through the distributors, and the want/demand for their products rise, I would then recommend proposing a joint venture with an already existing chocolatier.
This means that Ocho could sell their blocks/bars, and the local company could sell the two main forms, chocolate en barra and chocolate en rama. This strategy would require a close business relationship between Ocho and said chocolatier, this may require frequent travel which could get expensive.
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