The report from International Data Corp. (IDC) said that spending on Web commerce in Latin America reached nearly $167 million in 1998, an increase of 361 percent over 1997 levels.

Throughout 1998, growth in regional Web commerce spending was significant as new Web users were busy dabbling in the increasingly popular trend of Web purchasing and corporations were beginning to roll out their business-to-business commerce solutions. However, economic difficulties being experienced by the major market -- Brazil -- are expected to dampen this robust growth, the report said.

IDC's prediction of 175 percent growth in regional spending for 1999 is far lower than the potential spending that could have been realized had the region been experiencing healthier conditions. Still, as the economic situation shows signs of improving, IDC expects the region to have an above-average compound annual growth rate of 117 percent between 1998 and 2003.

User growth in Latin America leads the world with 4.8 million users in 1998 and an estimated 19.1 million users by 2003, the report said.

"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 obstacles need to be overcome before it becomes a reality."

Obstacles include weak credit card processing infrastructures, the high cost of basic Internet access, existing tariff barriers, and the high cost of shipping.

The findings were released in IDC's 1999 Latin America Internet and eCommerce Strategies study.

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