La Salada: Inside South America’s largest informal market

La Salada: Inside South America’s largest informal market

Jan 25th 2014 | Buenos Aires | From the print edition

IT IS five o’clock in the morning, but shoppers in La Salada market in Buenos Aires are already going home. They drag rubbish sacks full of T-shirts, trainers and pirated DVDs across the car park to board waiting coaches. Some have come to stock their shops, others to fill their wardrobes. They started shopping when the market opened at 3am, and have travelled from as far as Neuquén, a Patagonian city 15 hours away.

La Salada is thought to be South America’s largest informal market. Around 30,000 wire-mesh stalls spill out of three warehouses in an unsavoury neighbourhood on the outskirts of the capital. Its administrators reckon that on Tuesdays, Thursdays and Sundays, when the market is open, more than 250,000 shoppers browse its stalls. Tens of thousands of people help keep La Salada running—selling, protecting, cleaning and supplying the market. At the Punta Mogote warehouse, where most stalls are underground, so many people faint that an ambulance is kept on site.

Hard numbers are impossible to come by but administrators estimate that vendors sell 150m-300m pesos ($22m-$44m) of goods every day La Salada is open. According to Jorge Castillo, who manages Punta Mogote, vendors pay up to $100,000 in cash for a stall measuring four square metres—more than they would for space in a former Hermès store on Avenida Alvear, the main shopping street in Buenos Aires.

La Salada has its murky side. In one bizarre case a man who bought a poodle puppy at La Salada claimed he was duped into bringing home a fluffy angora ferret on steroids. Nacho Girón, a journalist who has written a book on the market, insists that this story is itself one of La Salada’s fakes. Piracy is undeniably rife. Stalls in Punta Mogote sell copies of Tommy Hilfiger shirts for 110 pesos. At street level, vendors hawk Nike knock-offs and flimsy “Ray-Ban” sunglasses.

Mr Castillo is engagingly open about the dubious merchandise sold by some of his vendors. La Salada’s merchants, he acknowledges, may not follow the rules when it comes to intellectual property “but this is Argentina. Nothing is ever just black or white.”

Taxes are certainly a grey area. All shopping is done in cash, leaving ample room for fudging the accounts. Tax officials have trouble enforcing their writ: in one 2009 tax raid vendors from Punta Mogote lobbed thousands of eggs at agents until they fled. The police are reckoned to be more complicit, demanding bribes in exchange for ignoring contraband goods.

Given La Salada’s popularity among Argentina’s poor, the government has long understood that attacking it would be politically risky. According to Mr Girón’s book, Néstor Kirchner, a former president, privately described the market as “a social phenomenon of Argentina in crisis”. “Shoppers love us because we allow them to buy what they need and also have a little left over to treat themselves,” says Mr Castillo. “Vendors love us because we don’t take their hard-earned cash.”

That ethos stretches back to the market’s foundation in 1991 by a bunch of struggling Bolivian clothing producers. Sick of being exploited by factory bosses who paid them poorly and late, the manufacturers gathered enough money to buy the site of abandoned thermal baths. The market was an immediate hit. Mr Castillo, who had been a women’s shoemaker, began buying stands in La Salada’s second warehouse in 1994, before leading the way in opening Punta Mogote in 1999.

Ferreting out the bargains

Competition is at the heart of La Salada’s model. When the market was founded the Argentine peso had just been pegged to the dollar, making imported textiles far cheaper than Argentine-made fabrics. To succeed, vendors had to cut prices right back. Competing with imports is no longer a problem, thanks to currency controls and heavy taxes: the government’s latest wheeze is to require shoppers to pick up goods bought from foreign websites at customs offices so taxes can be collected. But with so many stalls next door to one another, competition at the market remains cut-throat. “The good and the bad of Argentina are embodied by La Salada,” Mr Girón reflects. “It is at once a display of Argentine creativity, intelligence, resilience and grit, and an exhibit of Argentine cunning and corruption.”