DESPITE DOUBLE-DIGIT GROWTH FIGURES--and predictions for even more significant increases in 2000--Internet subscribers are a rare commodity in Venezuela.
There are only an estimated 350,000 cyberspace surfers out of a population of 23 million, a market penetration far below that of neighboring South American countries. A combination of financial, psychological and historical factors threaten to keep it that way.
In part, Venezuela's deep economic recession and falling incomes have caused computer sales to dwindle. Many households have even given up their telephones. And the country's poor telecommunications infrastructure discourages many potential Internet users.
E-commerce has also developed slowly--online sales totaled only an estimated US$1 million to $3 million in 1999. Many Venezuelans are unwilling to send confidential information via phone. Fear of bank fraud is a psychological barrier and consumers are still reeling from a 1994 financial crisis that wiped out half the nation's banking system. Outdated laws also require a signature for credit card purchases, making online approvals of domestic credit cards virtually impossible.
Other hurdles for e-commerce include a second-rate postal service, overpriced online goods and services that often exceed those of traditional retailers, poor web page designs and product choices.
Tax Attorney Turns Used-Car Salesman. When Venezuela suffered its worst economic recession in recent history, Luis Carlos Uzcategui launched the most successful business venture of his career.
The 32-year-old attorney had been earning a comfortable living advising clients on tax and investment matters. Yet he dropped the law to work full time selling used cars over the web.
He and his partner, Roberto Rivas, noticed numerous cars with for sale signs throughout the streets of Caracas. "The idea hit us like a lighting bolt and the next minute I was on the Internet buying the website domain," he recalls.
At first, Uzcategui dashed back and forth between his...