FORT LAUDERDALE, FLA. (04/19/2000) - In what is to date the most optimistic outlook for electronic commerce in Latin America, Forrester Research Inc. is predicting that online sales will reach US$82 billion in the region by 2004, and that's without counting México, which the analyst firm considers as part of North America.
These projections contrast wildly with recent forecasts from other market researchers concerning Latin America's e-commerce market. As an example, International Data Corp. (IDC) predicts that e-commerce transactions -- both B2B (business-to-business) and B2C (business-to-consumer) transactions -- will total about $8 billion for the entire region, including México, by 2003. [See "Online Sales Boom Seen in Latin America," March 31, 1999.] The IDC prediction is about 90 percent less than Forrester's estimate.
Another point of divergence in the Forrester study is that IDC and other market researchers like Jupiter Communications Inc. say that Brazil is, and will continue to be over the coming years, the largest e-commerce market in the region.
Such a suggestion is wrong, according to Forrester, who forecasts that México's e-commerce market -- projected at $107 billion by 2004 -- will be larger than the markets of all other Latin American countries combined.
For example, Jupiter Communications predicts that business-to-consumer online sales will reach US$8.3 billion by 2005, with Brazil accounting for $4.2 billion and México for $1.5 billion.
Forrester is predicting that México's e-commerce market will dwarf those of other Latin American countries. This is mainly due to México's trade ties and volume of sales with the U.S. in industries such as automotive, petrochemicals and electronics, said Matthew Sanders, an associate analyst at Forrester in Cambridge, Massachusetts, in a phone interview today.
"México is much more closely tied to the U.S. supply chain" than South American countries, he said.
Forrester predicts that most of Latin America's projected e-commerce trading -- $76 billion -- will be in the business-to-business sector, with the remaining $6 billion coming from business-to-consumer transactions.
Brazil's online sales will reach $64 billion and Argentina's will be $10 billion by 2004, according to the market research company.
Forrester's projections would be even more optimistic if the study had included all countries in the region. But the research only took into consideration several of the region's biggest Internet markets -- Brazil, Argentina, Venezuela, Chile, Perú and Colombia.
The $82 billion in online sales that Forrester is predicting for Latin America by 2004 will account for only 1.2 percent of the world's total. North America, made up of the U.S., Canada and México, will lead the world with about half of e-commerce trading, followed by Asia-Pacific, according to Forrester.
Forrester, in Cambridge, Massachusetts, can be reached at +1-617-497-7090 or at http://www.forrester.com/.