A new industry report says that spending on Web commerce in Latin America is
projected to reach the $8 billion mark by the end of 2003.
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.