Ecommerce: Latin America

A survey of current ecommerce prospects in Latin America.

Background: Ecommerce in Latin America

The Latin American ecommerce market ranks fourth in the world on turnover — after the USA, Europe and Pacific rim countries. {1} Accordingly, though Latin America has seen some of the world's fastest growth in online business, {2} which will continue — an optimistic Forrester 2000 estimate put Latin American ecommerce at $82 billion in 2004 {3} — ecommerce currently accounts for only a tiny fraction of retail sales. There are marked cultural differences between individual Latin American countries, moreover, and Latino attitudes to Internet business are not always those of their northern cousins. {4}.

 

Current Issues

Problems are those common outside the USA:

• different tariffs and tax structures.

• IT infrastructure of varying quality.

• lack of cross-border logistical support.

• conservative banking attitudes.

• restricted choice of software, payment service providers and MAPs. {2}

• digital divide between more and less affluent population sectors.{5}

• high Internet (i.e. telephone) charges, now being reduced. {6}

Ecommerce Prospects 2003-4

Internet use should increase steadily throughout the region, with a variety of measures boosting growth in Mexico, Argentina, Chile and Brazil. {7} A July 2001 eMarketer report provided these estimates of Latin American Internet use and ecommerce distribution. {8}

Millions of Internet users:

	2001	2002	2003	2004
Brazil	6.1	8.8	12.5	16.4
Mexico	2.3	3.2	4.6	6.4
Argentina	1.5	2.0	2.5	3.0
Rest of Region	5.5	8.0	11.4	15.0
Total	15.3	22.1	31.0	40.8

Online sales (in US$billion and % of Latin American total):

	2002	2004
Brazil	6.5 (68%)	39.9 (60%)
Mexico	1.54 (60%)	13.3 (20%)
Argentina	0.87 (9%)	6.65 (10%)
Rest of Region	0.67 (7%)	6.65 (10%)
Total	9.63 (100%)	66.5 (100%)

Another survey estimated that online sales in Mexico would reach 8.4% of total retail sales in 2004, as opposed to 13.3% for the USA. {2}. Despite the economic slowdown, scattered news items suggest sustained confidence in the region. Early in 2002, for example, Yahoo secured a foothold in the Brazilian Internet market by purchasing the search engine Cade {9} and Artikos won three major procurement contracts in Chile {10}

The July 2002 Economist Information Unit {11} ranks preparedness for ecommerce in Latin America as follows (USA scoring 8.41)

Country	Index
Chile	6.36
Mexico	5.67
Brazil	5.31
Argentina	5.14
Venezuela	4.91
Colombia	4.77
Peru	4.43
Ecuador	3.68

Ecommerce is beginning seriously in Latin America, though progress will depend on overcoming the problems listed above, which are at least being addressed by the governments concerned. Latin America is the fastest-growing Internet market, but is still the smallest. {12}

References and Sources

This page was written in 2003. The picture has not much changed, but to obtain a current survey, plus references and information sources, please consider the e-book.

Company  | Disclaimer  | Email

Copyright © 2002 2003 2004 2005 2006 2007 2008 LitLangs All Rights Reserved