Want to make money online in Latin America? Start by using the Internet to streamline existing operations before launching electronic commerce. And don't forget Brazil.
EARLIER THIS YEAR, IN A HIGH-PROFILE EFFORT, VisaNet do Brazil, a joint venture among Visa International, the U.S. credit-card company, and Brazil's Banco Brazil, Banco Real and Banco Bradesco, debuted a virtual mall at www.visamall.com.br that is expected to do more than US$300 million in sales in its first year of operations. Customers can obtain access through the web site to retailers like FloraNet, an online florist and delivery service; Virtual MarShop, a home appliances retailer; and Livaria Cultura, a bookstore.
Consumer storefront projects, like the Visa deal in Brazil, are glitzy and glamorous. But, behind the scenes, manufacturers are spending hundreds of millions of dollars upgrading intranets to communicate with suppliers and others. "Some people may think that Latin America lacks the infrastructure needed for electronic commerce," says Elio Catania, Latin America president of IBM, the U.S. technology company. "But that's not the reality. We think the e-business growth rate will explode in the coming years."
Interest in the Internet is so strong in the Latin American business community that, according to IBM, thousands of people have attended its e-commerce seminars in Sao Paulo, Mexico City, Caracas and Buenos Aires. IBM is not the only company excited about the prospects. "We are involved with [the] top two or three groups in nearly every country looking for electronic business opportunities," says Mauricio Santillan, director of Latin America for U.S. software developer Microsoft.
More often than not, these opportunities do not lie in online retail outlets. Estimates of how many Latin Americans have access to the Internet vary wildly: anywhere between 2 million and 10 million. While some companies have had interesting results selling products over the Internet, most e-commerce activity centers around business-to-business use in attempts to make existing commercial relations more speedy and efficient. Indeed, according to a new report by the U.S. Internet consultancy G2R Inc., Latin American companies are "anticipating the increasing opening of local and global markets," and are looking to electronic commerce to help pave the way to competitiveness. Companies in banking and finance, communications, manufacturing and utilities are all employing e-commerce to...