LOS ANGELES (04/04/2000) - Latin America's electronic commerce market has a lot of potential, but vendors who view it as a gold mine that's there for the taking risk failure, according to industry executives.
The expected boom in e-commerce in Latin America is promising, but vendors must take a number of factors into consideration if they wish to succeed, participants at a panel discussion said yesterday at the Latin American Internet Forum. The Forum is taking place here at Spring Internet World 2000.
For example, there are trade and customs barriers to Net commerce in Latin America, as well as fulfillment difficulties, that electronic retailers must deal with, the panelists said.
"(Either) you are creative and inventive (and manage) to transform the business-consumer relationship or you are out of the business tomorrow," said David Johnson, chief executive officer and founder of New York-based Todosport.com, a portal devoted to Latin America's sports scene.
B2C (business-to-consumer) online spending in Latin America is expected to reach US$8.33 billion in 2005, up from $194 million last year, according to New York-based market research company Jupiter Communications Inc. The number of Internet users in Latin America will grow to 66.6 million in 2005, or 12 percent of the region's population, up from 10.6 million in 1999. Of those 66.6 million expected Net users in 2005, 22.7 million will be online buyers, according to Jupiter.
But low credit card and PC penetration must be overcome, and delivery and fulfillment infrastructures must be improved in order for e-commerce's promise to become a reality in Latin America, Jupiter has said.
Community-building efforts, such as cybercafes, can help tear down some of these barriers, panelists said today.
The cybercafe industry has grown rapidly in the region, said René Crespo, president and founder of Altesa.net in Quito, Ecuador. Altesa.net provides Internet-related services such as Web hosting and site building. In Quito alone there are 120 cybercafes and a total of about 200 nationwide, aimed at families and tourists, Crespo said. Quito has a population of 1.2 million.
E-commerce entrepreneurs must convince Latin Americans that buying over the Internet is a good thing, since making online purchases isn't part of the region's culture yet, said Alonso Carral, CEO and general director of To2.com, a portal based in Mexico City.
Companies who aim at succeeding at a regional level must tailor their operations to each country in which they do business, including adapting their sales strategy and their sites' content, said Todosport's Johnson.
More information about Spring Internet World 2000 can be found at http://events.internet.com/spring2000/.