south america e-commerce 2006

8/14/2019 South America E-commerce 2006

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Business Developmente-commerce

overviewSouth America

(Draft - 09/2006 - V 0.1)


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CONTENTS

Strategy ....................................................................................................................... 3

SOUTH AMERICA............................................................................................. 5

BRAZIL .............................................................................................................. 6


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Strategy

First Six Months

Study of local marketo Competitorso Partnerso Supplierso Prioritize Targets

Develop a Business Model to offer to Prospectso Transportation costso Import Taxeso Custom taxes and storage costso Supply costso Front End software (Portuguese and Spanish)o Interfaces and Plug-inso Commercial Modellingo Return of Investment

Develop Proposals and place them.

Second half-year

Evaluation of the work done (with two possible lines).o First line: Develop Local Structure and a local office.o Second line: Continue home-based office.

IF First Line: Develop local maintenance service and structure.

Initiate South America contacts: Argentina and Chile (and Mexico???).

Second Year (using First Line)

Divide Brazil in three regions:o Northeast-Northo Southeast westo South

Define Account Managers for Brazilian regions. Help to develop the Brazilian framework Business Model in Argentina,

Chile.

Initiate contacts: Uruguay, Peru, Colombia, and Venezuela.


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Third Year

Sediment position in Argentina and Chile (Mexico???), by having local

maintenance service and training services. Help to develop the Brazilian framework Business Model in Uruguay,

Peru, Colombia, and Venezuela.


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South America

It is a region with a peculiar manner of doing business. They are very sensitive

to regional government policies; the social pyramid is amazing, the socialnetwork is very important to the success of business and they have someconstraints to foreigner business, mostly when they are not established in theircountry (South America countries).

The motivation of those constraints is the experience that when something goeswrong the foreign company closes the door and go home or as the currencyexchange floats, and in most countries are not very stable, the products andservice may became inaccessible.

So it is very important to have local presence and an established position, notonly for sales, services but also for maintenance and parts reposition.

Others issues, in the region, are the problems with taxes and charges,precarious infra-structure, bureaucracy which facilitates corruption, and the faultof commitment in business practices. This determines a specific practice thatmany times is not understood and unbelievable to Europeans.

The most important and more stable South America economies are from Brazil,Argentina, Chile and Mexico. And they are the suggestion to begin the marketdevelopment.

First approach will be in Brazil, and than the other countries, in which order, itwill depend on the development of the local contacts and current local policiesand economy. But the estimative is to dedicate, at least, the first six monthsexclusively to Brazil.

Some South America e-commerce key figures:

Argentina

The expectation is that e-commerce (B2C), in 2006, reach 560 millions ofeuros. This represents a 60% growth on on-line transactions over 2005.

Argentina ends 2005 with 10 millions Internet users and can end 2006 withmore than 13 millions users.

The average transaction changed from 12 euros to 36 euros. And it is expectedto rise to 72 euros motivated by the on-line sales expansion of consumptionproducts, like digital cameras, computers and others.

The B2C market is concentrated in free sales and auction sites like ebay. The

retail market has a small participation.


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Source: Prince & Cooke y Carrier y Associados, September 2006.

Chile

The e-commerce (B2B and B2C) transactions in Chile reached US$ 8.250millions (6.496 millions euros) in 2005 and it is expected to be U$ 10.500millions (8.267 millions euros), 25% growth, in 2006.

The B2C market is expected to reach in 2006 around US$ 250 millions (196millions euros). In 2005 this market increased 115% motivated by an incrementof on-line users maturity and the offer of travel tickets and on-line gambling.

Internet users in 2005 were around 6.5 millions with an increase of 20% over2004 and it is expected to be around 7 millions at the end of 2006.

Source: Prensa de la Camara de Comercio de Santiago, Chile, July 2006.

Mexico (It is Central America)

The e-commerce (B2C) reaches 2.384 millions of pesos (165 millions euros) in2004.In 2004, first quarter, was registered 450 millions pesos (31 millions euros) andat the same period in 2005 rose to 806 millions pesos (56 millions euros), anincrease of 81%.

There are around 17 millions Internet users, in July 2005.36% of internet users sad that they expend between 400 and 1000 pesos (27and 76 euros), on-line shopping, in August 2005.

Source: AMIPCI, Mexico, August 2005.

Brazil

In 2005, the e-commerce (B2B and B2C) rose 30%, reaching US$ 65.3 billions(51.41 billions euros).

The B2C market was US$ 3 billions (2.36 billions euros), in 2005.

User Profile

There are 33 millions Internet users and only 16% buy on-line.

The average ticket was R$ 321.00 (119.00 euros) in January 2006 (source:camera-e.net).

Payment profile:


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Bank bill 83%

Credit card 57.8% Bank deposit 48%

Debit card 28.9%

Virtual credit card 12% Electronic cheque 4.8%

In June 2006, 13 millions used the Internet, and almost 70% were by broadband. The record of connected hours is with Brazil. Home user stays, onaverage, 20 hours surfing. It is more than Japanese and American score.

Some B2C Brazilian Market Leaders (revenue from 2005)

GOL Brazilian airlines Tickets US$ 1.110 millions (866.14 millionseuros).

Visanet Credit card US$ 769 millions (605.51 millions euros).

Submarino retail US$ 245 millions (192.91 millions euros). Magazine Luiza retail US$ 76 millions (59.84 millions euros).

Ponto Frio retail US$ 62 millions (48.81 millions euros).

Comprafacil retail US$ 32 millions (25.19 millions euros). Lojas Colombo retail US$ 10 millions (7.87 millions euros).

Flores Online Flowers US$ 3.4 millions (2.67 millions euros).

DVD World retail US$ 3.3 millions (2.60 millions euros).

Beephoto retail US$ 1.7 millions (1.33 millions euros).

Source: INFO specialised IT Magazine, August 2006.

south america e-commerce 2006

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