IDC Latin America’s Surveyed Web Pioneers Will Reach US$6.9 Million in Online Sales per Company in 2000

MIAMI, FL — DECEMBER 7, 2000 — IDC's recent survey of 161 Web merchants in Latin America revealed the region's leading online sellers will generate a total of US$1.1 billion in online sales in 2000, or an average of US$6.9 million per company. The online revenues achieved by the leaders surveyed are enabled by significant investments made to launch and publicize Web-based initiatives. Collectively, the Web merchants surveyed in Latin America spent US$111 million on initial site creation and an estimated US$129 million on 2000 Web site promotions. Because the bulk of the sample was based in the region's countries, a high proportion of this spending was locally focused, with the primary beneficiaries being vendors with a local presence.

 

Outside service providers played a critical role in the realization of Web sellers' ecommerce solutions. According to the study, on average 57% of the site design and creation process was outsourced, 53% of security installation and maintenance was outsourced, and 70% of survey respondents utilized outside Web hosting services. Well-known vendors and service providers were frequently key partners in ecommerce solution deployment. Companies like Microsoft, Compaq, IBM, Oracle, Cisco, Hewlett-Packard, Terra, PSINet, and Verisign provided critical assistance to the Web pioneers of Latin America.

Initial site investments varied significantly based both on business model and geography. Internet pure-play companies typically spent significantly more than brick and mortar companies on both the initial Web site creation and its subsequent promotion, while B2B companies on average spent less than one-third on Web site promotions than B2C companies. Spending on Web site creation and promotion in markets such as Colombia and Venezuela, where Internet penetration is lower and the domestic market is smaller, were understandably lower than average spending levels in Brazil and Argentina.

"Despite the significant challenges to ecommerce in Latin America, the Web-based sales channel is not going away," said Melissa Utter, research analyst with IDC Latin America. "The leading Latin America Web merchants surveyed are bullish about their online strategies, expecting an increase in repeat Web customers, growth in total Web-based sales, increased international sales, and a broadening of the scope of Web site services and functionality."

More information on the strategies and performance of some of the leading online sellers in Latin America can be found in IDC's report Latin America 2000 Web Sellers Survey – Best Practices of Online Merchants, Volumes 1 and 2 (IDC #LA10756 and #LA10776). The study provides an evaluation on how leading Web merchants in Latin America are deploying their ecommerce solutions, including online transaction capability, hardware, software, access, and logistics and promotional strategies. The report also examines the sales performance and opinions of the leaders to assess how ecommerce is currently developing and the prospects for its future evolution in the top six country markets of Latin America (Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela). To purchase this report, contact Demetra Georgakopoulos at 1-800-343-4952 extension 4496 or demetra@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

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

# # #

All product and company names may be trademarks or registered trademarks of their respective holders.