Monday, February 5, 2001

Brazil Spearheads Online Baby Boom in Latin America

According to the new eLatin America Report, Brazil's 3.9 million internet users accounts for 40% of the region's total internet usage, which is, by far, the most of any country.

The report reveals that three countries: Brazil, Mexico and Argentina, account for approximately 65% of the region's 9.9 million internet users with Brazil claiming 3.9 million, Mexico with 1.5 million and Argentina with 1 million.

"Brazil is by far the leading market for internet commerce in both the B2B and B2C segments," said Noah Elkin, Ph.D. and Senior Analyst at eMarketer. "All countries, however, will see impressive growth in e-commerce revenues over the next few years, although the B2B sector will grow most quickly."

Key Report findings about Brazil:
· Brazil is highly urbanized, with 81% of its population living in cities, ten of which have more than one million inhabitants
· The concentration of the population in cities will facilitate the delivery of goods ordered online, and in part compensate for the vast distances that separate Brazil's many urban centers
· 49% of Brazilians are ages 24 and under

This eMarketer Report provides a guide to the internet in the Latin American and Caribbean regions focusing in particular on Argentina, Brazil and Mexico, the region's three largest internet markets. By combining eMarketer's own forecasts with estimates from other research firms, this report gives the reader a complete picture of the internet's evolution across the region.

The eLatin America Report provides key statistics and information in over 179 pages, with over 250 charts and graphs illustrating original analysis and projections, aggregating research data from a variety of sources, including Forrester Research, Jupiter Communications, The Strategis Group, The Gartner Group, American Express, The Yankee Group, Morgan Stanley, TGI Latina, Ovum, Goldman Sachs, Zenith Media, TowerGroup, Media Metrix and the Santiago Chamber of Commerce.

eMarketplaces Are a Booming Business in Europe
European business-to-business (B2B) Internet commerce will increase in value from 61 billion euros in 2000 to over 1.5 trillion euros in 2005, according to new IDC forecasts. eMarketplaces will be responsible for the majority of this growth in the mid to long term.

According to IDC, B2B ecommerce will be driven by numerous factors. "Companies wish to optimize the flow of information within the supply chain. The Internet is an excellent platform for this as the infrastructure is there today. The desire to implement ecommerce solutions may also be spurred by business partners that are interested in maintaining an electronic dialogue with their clients and suppliers," said Mikael Arnbjerg, IDC's lead analyst in European B2B and eMarketplace research.

However, B2B has to overcome some barriers along the way including security concerns and, in certain industries, a lack of understanding of what the Internet can do. "The discouraging experiences of the dot-com shakeout may still have a negative effect on B2B ecommerce initiatives, although this should not be such a negative correlation," Arnbjerg said.

IDC distinguishes three types of B2B Internet commerce: edistribution, emarketplaces, and eprocurement. eDistribution accounts for the majority of B2B Internet commerce transactions today. Although the volume of goods sold via edistribution is growing, growth will slow over the next few years as buyers and sellers turn to other types of B2B ecommerce models. eMarketplaces are the fastest-growing segment in ecommerce and will continue to grow rapidly over the next five years. The growth of eprocurement is almost as impressive, but eprocurement is mostly interesting for larger companies that will dominate this segment.

From the perspective of novelty business models, emarketplaces will be the most interesting to watch.

"eMarketplaces will position themselves through a combination of commerce and other services. In terms of revenue, emarketplaces may opt for a transaction fee-based solution, but this may not work well in all industries. An alternative solution is membership fees. Industry-specific content may help the emarketplace obtain a better position in the quest to become a market leader," Arnbjerg said.

Additional services, such as ebusiness consulting, may also develop into a revenue stream for emarketplaces.

News Tidbits (appears every day on the front page)
- Unionizing efforts are now being targeted at Webvan.com. Union organizers are trying to get the support of at least half of Webvan workers in order to hold a unionization vote.

Return to February 2001 News Archive