IP: Invest your pesos with care

[Dave Farber <farber () cis upenn edu>]

> From: "Janos.Gereben" <janos451 () earthlink net>
> To: "jg" <janos451 () earthlink net>
> Subject: Invest your pesos with care
> Date: Mon, 19 Feb 2001 21:20:50 -0800
> X-Mailer: Microsoft Outlook Express 5.50.4522.1200
>
> Latin American e-business at the crossroads
> Janos Gereben - the451
>
> [Conference participants see the region's 2% Internet access as symbolic of
> both a tough challenge and a big opportunity.]
>
> SAN FRANCISCO - Statistics, projections go through the roof. Reality is
> something else. The second annual Latin American e-Commerce Summit - held on
> Monday in San Francisco's Fairmont Hotel - reached a consensus on the
> contradiction this vast land presents, of great potential and the terrible
> obstacles of overpopulation and poverty. On the plus side of demographics is
> the fact that the Latin American population is much younger than statistics
> show for the US, Europe and Japan - meaning that the future consumers of the
> continent, on the whole, are far more eager to use the Internet and on-line
> purchase than it's true elsewhere.
>
> With the lure of 540 million potential customers, Latin America is still a
> minor player in attracting technology (or most other kind of) investment,
> and rare is the company such as Convera whose predecessor (Excalibur)
> managed to sell Internet software and services in Argentina, Brazil, Chile
> and Mexico sufficiently to receive 10% of its revenue from the region.
> Equally unusual is the flow of money the other way, such as evidenced in the
> Loral purchase of a whopping 75% interest in Satelites Mexicanos.
>
> Examples of e-commerce activity in the continent came down to such miniscule
> items as Pedro Noyola's story about La Pizza de la Esquina, a small chain of
> pizza parlors in Mexico, unable to buy PCs and Internet access, switching to
> two-way pagers with small printers to take orders. Noyola, CEO of Regional
> Market Makers, told the conference that innovation and low-cost solutions
> can be put to good use and business can employ available technology to
> improve business. The Sierra Coffee Co., in a remote region of Mexico not
> even fully electrified (similarly to contemporary California), is using a
> single satellite dish, Noyola said, to sell coffee directly to Nescafe and
> other big firms, bypassing middlemen. He also spoke of Ixe Banco mixing
> technology and old-fashioned services (delivering cash arranged by email) to
> fulfill a need in Mexico City.
>
> In sharp contrast with these and many other stories of small-scale use of
> technology are the mind-blowing projections from major analysts. The most
> conservative prediction, from IDC, shows an increase of B2B e-commerce
> spending in Latin America from $147m in 1998 to $8.35bn by 2003. The Yankee
> Group's B2B forecast by 2005 is at $63bn. Forrester Research estimates all
> e-commerce in the region at $82bn by 2004.
>
> Forecasts of a tsunami are not accompanied by reports of significant
> precipitation just now. Even the name of the meeting lacked substance:
> unlike what is expected from a `summit,' the conference was short on top
> companies, even in the titles of participating government officials.
> Curiously lacking in US government participation, the meeting was attended
> by minor officials from the region. The announced keynote speaker, Dominic
> Orr, Nortel/Alteon Content Networking Business Unit president, had more
> pressing business in Asia, so he sent an executive from Alteon's Brazilian
> branch - who delivered a 20-minute speech of such generalities that the
> reporter's notebook remained completely blank, without a single item of
> interest.
>
> On the other hand, many participants from the region as well as from Miami
> (which contributed about a third of the audience and of the speakers) showed
> a great deal of spunk and determination to bring the continent into the new
> age. Besides Mexico City, metropolitan areas in Brazil and Argentina, Chile
> appears to be a leader in Internet use and investment. Already, at this
> obviously early stage, Internet access exists in Chile in more than
> two-thirds of its schools; while only 20% of the population has telephone
> service, already 15% use mobile phones, and 4.2% have wired access to the
> Internet (against the regional figure of 2%).
>
> Conference participants emphasized repeatedly that the true significance of
> e-commerce figures is in the existing and expected growth, rather than in
> themselves. Regional online spending last year, at $580m, was a fraction of
> the $61bn in the US, $9bn in Europe, and $7bn in Asia, but that half-billion
> dollar figure in Latin America represented a 432% increase over 1999. If
> annual growth continues anything like that, future `summits' may well see
> attendance by some titled movers and shakers.
>
>
> ~~~~~~~~~~~~~~~~
> Janos Gereben/SF, CA
> janos451 () earthlink net



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