E-Commerce Blossoms in Latin America

5 July 1999
According to the International Data Corporation (IDC), spending on Web commerce in Latin America reached nearly U.S. $167 million in 1998, an increase of 361 percent over 1997. In 1998, regional Web commerce spending grew rapidly as new consumer Web users dabbled in Web purchasing and corporations began to roll out their business-to-business commerce solutions.

IDC has predicted a 175 percent increase in regional spending for 1999. As the economic situation shows signs of improving, IDC expects the region to have an above-average compound annual growth rate (CAGR) of 117 percent between 1998 and 2003, and to spend over U.S. $8 billion by the end of 2003.

The increase of Internet users in Latin America leads the world with 4.8 million in 1998 and an estimated 19.1 million users by 2003.

"As the conduit to Web commerce, the Latin American extension of the information superhighway is more riddled with silver-lined potholes than it is paved with gold," said Annika Alford, program manager for IDC Latin America's Internet Research. "The potential is real, but many obstacle's need to be overcome before it becomes a reality."

Many obstacles impact the region's ability to foster Web commerce, including weak credit card processing infrastructures, the high cost of basic Internet access, existing tariff barriers and the high cost of logistics (i.e., shipping).

These findings were released in IDC's 1999 Latin America Internet and eCommerce Strategies study, which was the first-time adaptation of IDC's Internet Commerce Market ModelTM in the Latin America region. The study reviews Internet penetration, users and buyers, as well as average Web spending in the six major markets IDC covers--Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. Data is further segmented by user location--home, small business or government.

IDC provides full market coverage of PCs, mainframes, Unix systems and workstations, servers, desktop printers, professional services, local area networks, the Internet, RDBMS software, distribution channels, NT, and IT spending patterns in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. IDC also conducts primary research in Peru, Ecuador, Central America and the Caribbean. International Data Corporation is the leading supplier of IT market information in Latin America.

This complete study (IDC#LAECOM99) can be purchased through contacting Daniel Cardamone at 305-267-2616 or dcardamone@idc.com.