eMarketplaces Will Create Ample Opportunities Throughout Latin America, Once Hurdles Are Cleared, IDC Says

FRAMINGHAM, MA – AUGUST 15, 2000 – The explosion of business-to-business Internet commerce has reached Latin America in the form of emarketplaces. Latin American start-ups and traditional brick and mortars are in the process of launching numerous initiatives to seize the opportunity presented by emarketplaces.

"IDC views the emergence of emarketplaces as a strategic trend that will dramatically transform the competitive landscape in the region and accelerate ecommerce activity," said Anna Giraldo Kerr, research manager for IDC.

Although IDC is optimistic about the future of emarketplaces in the region, the technology market research firm warns many obstacles must be overcome before rewards can be reaped from this revolutionary concept.

"eMarketplaces are in an embryonic stage" said Annika Alford, research director for IDC. "They will have to overcome several challenges to become the key dis-intermediary agents we believe the market needs."

According to IDC, one challenge emanates from the strong looming competition emerging from within the region. "Latin America-specific emarketplaces of similar vertical or horizontal specializations are popping up throughout the region and will pose significant competition to each other," Alford said. "The resulting battle to bring in the Latin enterprise and establish a strong client base, and the growing focus on the region among U.S.-based players will help to usher in a period of acquisition and consolidation within the region similar to that seen in the region’s ISP market in 1999."

This competition will also bring about a strong need to localize services. "The absence of localization will result in lower perceived value-add among prospective emarketplace participants," Kerr said. "However, the need to focus on localized services may prove too costly in a market that spans multiple small country markets and where capital is tight."

Once the market does overcome the hurdles it faces, however, the rewards will be plentiful.

"The greatest benefit and opportunity of emarketplaces is their ability to bring ecommerce to the slower technology adopters in each country throughout Latin America, " Kerr said. "By doing this, emarketplaces will play a significant role in driving Latin America into the new economy."

IDC's recent bulletin eMarketplaces in Latin America: The Next eParadigm (IDC #LA1029G) defines what an emarketplace is and explains how it differs from other B2B models such as eprocurement and edistribution. This bulletin looks at the emergence of emarketplaces in Latin America and discusses the opportunities they will create as well as the challenges they will face. To purchase the report, please contact Daniel Cardamone at 305-629-3164 or dcardamone@idc.com or Nora Delgado at 305-629-3167 or ndelgado@idc.com.

With a network of six country offices in Latin America and two regional offices – in Silicon Valley, Calif. and Miami – IDC Latin America is the leading supplier of technology market research and consulting on Latin America. IDC Latin America provides full market coverage of PCs, mainframes, Unix systems and workstations, servers, desktop printers, professional services, local area networks, the Internet, telecom, RDBMS software, distribution channels, NT, and IT spending patterns in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. IDC Latin America also conducts primary research in Peru, Ecuador, Central America, and the Caribbean. For more information go to http://la.idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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