E-Commerce Gaining Interest in Latin America

Nearly 85 percent of companies in Latin America are using or are willing to evaluate e-commerce within the next two years, according to a study by International Data Corporation (IDC).

Despite the interest in e-commerce, actual implementation rates remain low, with only 11 percent of companies currently making use of e-commerce. The most active industry segment in Latin America is the finance industry, and e-commerce activity is higher among Mexican and Brazilian companies than other nations in the region.

“Overall, Latin America-based e-commerce can be characterized as a very nascent, but growing, market,” said Alex Manfrediz, an analyst with IDC Latin America. “It remains to be seen if this interest will translate into aggressive investments in the region or if this is simply overly optimistic projections fueled by the hype surrounding the Internet.”

According to the study, even the companies considering themselves to be e-commerce enabled have little transactional capability. Most do not have full e-commerce functionality and some are simply Web pages promoting their products. In addition, some companies seemed to equate the larger market of e-business (i.e., customer or supplier interaction conducted electronically) with the more functional specific e-commerce (order placement made electronically) market.

The e-commerce software market in Latin America is also limited, IDC found, forcing most companies with existing or upcoming deployments to build their own solutions in house or use third-party vendors (such as systems integrators). Nonetheless, the region has caught the attention of the predominantly US-based e-commerce software vendor community. Recent alliances and product offerings from ISPs, portals, and systems integrators are providing Latin American-based companies looking to take advantage of e-commerce more choices.

Microsoft continues to dominate the mindshare market among companies in Latin America, receiving the largest single vendor mentions for e-commerce solutions. IDC also found that e-commerce deployments are continuing in the region despite alleged Y2K anxiety. In general, the region’s solutions currently under implementation or being formally planned have greater functionality than existing deployed e-commerce solutions.

IDC’s research was based on interviews with nearly 500 companies in Latin America during June and July 1999.

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