The choice of a new pope from a continent accounting for 42 percent of the world's Catholics comes at a time of rising conversions in Latin America, Africa and Asia, eroding the Church's influence, experts say.
Pope Francis, the first Latin American chosen to lead the world's 1.2 billion Catholics, takes over at a time of turmoil and when many faithful are switching to evangelical Protestantism, disenchanted by a slew of issues.
Evangelicals count 565 million adherents and represent more than one-fourth of the world's Christians, according to French researcher Sebastien Fath. Of these, 107 million live in Latin America and the Caribbean.
Experts say this figure is steadily rising and includes the estimated 200 million Pentecostal or "Born Again" Christians, weaned away by the promise of immediate well-being and prosperity, colourful ceremonies and a personal experience with God.
They say that this, along with prophecies and miraculous healings, serves as a magnet for many in impoverished societies as they are in stark contrast to the austere framework of the Catholic Church.
Others say the Church appears to be cut off from the travails of the poor. A series of paedophile sex scandals involving priests has not helped either.
"The Catholic Church finds itself in competition with other movements since the 1980s especially in Africa and Latin America who are weaning away their flock," said David Behar from the religious affairs cell of the French foreign ministry.
"Guatemala was 95 percent Catholic but more than have of the population has converted to Neo-Pentecostalism," he said.
"In Mexico, the view that the clergy is too linked to the political establishment has seen the faithful turn to other, more independent, churches. In Brazil, more than a quarter of the population has switched," Behar said.
Behar said the growing threat to Catholicism was highlighted during a Synod of African bishops at the Vatican in 2009, who complained of "aggressive proselytisation by some missionaries."
The church has meanwhile tried to modernise and attempted to shed a dogmatic image that critics say is out of touch with the times.
In the pope's native Argentina, he along with other Catholic clergy drew criticism for failing to act against the "Dirty War" during which 30,000 people died or disappeared during the 1976-83 military dictatorship.
And he also battled to prevent Jesuits from joining the liberation theology movement, which drew many of the continent's Catholic priests into political opposition to Latin America's right-wing governments.
The pope, formerly Jorge Mario Bergoglio, has also been criticised for his opposition to gay marriage and contraception that has brought him into conflict with the Argentine government.