[Special report :                                                                                 e-commerce in Latin     ...
as banking service was used by more                    CLICS & MONEY                                                      ...
The advantage of being lastI n Brazil, the fierce battle in the arena of electronic commerce (see main article) has intens...
Brazilian e-commerce segment just                        the best sellers bought online. Sales                 demand is n...
The role of ownersT   he owners’ vision and support for electronic commerce is essential for creating a successful strateg...
The monthly purchase                                        The H1n1 swine flu was good for business at LeShop.com.ar. The...
Brazilian airline Gol is still the airline           are no physical goods to be delivered                          remain...
Agency take-offU   se sales prices as if they were a traditional consumption product. This was one of the ideas of Despega...
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Estudio con estadisticas y estado de situacion del Comercio Electronico y los Negocios por Internet en America Latina - Parte Uno en Ingles

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Acceda al estudio completo con metricas e indicadores sobre el estado de situacion y pespectivas para el 2011 del ecommmerce y negocios por internet en America Latina y sus paises realizado AméricaEconomía Intelligence por encargo de la firma de medios de pago Visa que fueron presentados en forma exclusiva durante los eCommerce DAY realizados en las ciudades de: Santiago (Chile), Lima (Peru), Buenos Aires (Argentina), San Pablo (Brasil), Mexico DF (Mexico) y el eCommerce LATAM en la ciudad de Bogota (Colombia) durante el 2010 organizados por el Instituto Latinoamericano de Comercio Electronico ILCE junto con Latinpacific y los capitulos locales que conforman el ILCE en cada país.

Para mas informacion ingrese al Observatorio y Centro de Estudios de la Economia Digital del Instituto Latinoamericano de Comercio Electronico: http://www.einstituto.org/?page_id=631 que tiene como objetivo general el promover la información económica y métricas sobre la evolución del comercio y los negocios electrónicos y sus efectos a escala internacional, de América Latina y de las economías nacionales que la componen.

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Estudio con estadisticas y estado de situacion del Comercio Electronico y los Negocios por Internet en America Latina - Parte Uno en Ingles

  1. 1. [Special report : e-commerce in Latin America June 2010] R elax… Those who feared that the developing e-Commerce business in LAC was going to be another victim of the global financial crisis, can release a sigh of relief. The Internet as a distribution channel of products and services continued to grow despite the collapse of economic indicators around the globe. According to a study conducted by AméricaEconomía and commissioned by the payments company Visa, eCommerce to consumers (B2C) grew 33.2% in 2009 representing US$21.175 billion in Latin America & the Caribbean. In 2010 forecast of another 27% is expected by the end of the year bringing the total close to US$28 billion in B2C. In the midst of a season filled with decreasing economic and financial PICTURES: PATRICIO OTNIEL indexes, the growth was expected. eCommerce reflects a profound change in the way consumers relate and behave with companies that provide them with products and services. These behaviorThe strength trends experience little impact from the negative GDP reports or confidence decline of international investors in the market.of e-commerce To see it a different way, despite the market stagnation, many of the fundamental components that drive eCommerce continue developing. PC and Broadband penetration grewDriven by Brazil, tourism and by at a rate of 20% & 15% respectively (at the end of 2009, there were 150determined retail merchants, electronic million PC users and 40 million with access broadband in the region).commerce continues to grow in Latin Simultaneously, access to a varietyAmerica. of payment methods was available
  2. 2. as banking service was used by more CLICS & MONEY 34,497.3 Total spending in e-commerce B2C in Latin America (US$ millions)and more people. Source: América Economía Intelligence And that’s not the end of the story. 30.000 27,597.9Airlines and large retailers began 25.000offering increasingly more sophisticated 21,774.9 20.000offerings which paved the way for small 15,645.0and medium businesses to perfect their 15.000 10,572.5on-line business models. Demand also 10.000 7,542.5grew by a generation being educated 4,885.0 5.000 3,042.1on-line, joining the labor force, and 1,866.4able to satisfy their consumption needs 0 2003 2004 2005 2006 2007 2008 2009 2010p 2011pvia the Internet. The perception ofsecurity also improved (see graphic) MAturINg MArkEtS Brazil Chile B2C as % of PGB Mexico Latamwhich facilitated the move towards Source: América Economía Intelligence 0,9%on-line purchases. “In Latin America, 0.84%we finally reached a critical mass of 0,8%users so that many business modelson the Internet can rapidly produce 0,7% 0.64%revenue”, says Alec Oxenford, founder 0,6%of the online auction house DeRemate. 0.54% 0.52%com (purchased by MercadoLibre.com), 0,5% 0.52% 0.42%who is currently the head of OLX.com, 0,4%an online service for free ads with a 0.33% 0.36% 0.35% 0.26% 0.32% 0.30%global presence. 0,3% 0.27% Another observation drawn from the 0.19% 0.24% 0,2% 0.20%study was the unbalance growth that 0.14% 0.18% 0.18% 0.13%was experienced. In several markets, 0,1% 0.09%0.11% 0,11% 0.13% 0.10%the market crisis was a justification to 0.05% 0.07% 0.07% 0,0%postpone the technological and logistic 2003 2004 2005 2006 2007 2008 2009investments that were necessary toimprove their on-line business models. this, were the retailers in Colombia and is only now making the investmentsThis decision impeded the growth Peru who showed significantly lower necessary to develop their on-lineof products and services acquired growth rates. The Colombian group business in 2010 (see The Role of thethrough this channel. An example of Éxito, the biggest retailer in Colombia, Owners case). Scattering beans around the World T he click that allows your ecommerce business to be taken to any part of the world, resulted very true for Costa Rican of Café Britt. Actually,, 95% of the USD$5.1m of coffee this famous Central American brand sold over the Internet, has a US & Canadian destination. “We expect a tourist that travels to Costa Rica have a cup of coffee on the flight, arrive at the airport, by chocolate and bags of Café Britt as gifts, and take a discount card for future on-line purchases” says Pablo Vargas, Executive President of Café Britt who mentions that marketing and international logistics are fundamental to his operations. Café Britt has ongoing agreements with FedEx and DHL and has CafeBritt.com established a customer service center in San Jose whose staff is university graduates and bilingual and is able to service clients around the globe. “Even though we are a small country, through the Internet we are able to offer excellent service and a very positive shopping experience – offering on-line chat assistance, direct customer service via phone, and response via email within 2 hours” says Vargas. Having seen the on-line business grow from 15% annually, Vargas expects10% expansion in 2010 from International sales. While electronic commerce remains small in the country and only a few players with nominal sales (primarily supermarket chains from the US), Vargas says that many coffee companies have looked into commercializing their products through the Internet. Most have these efforts are short-lived when results are not quick to come by. “That is not how it works – positioning in the Internet is a long strategy” says Vargas. “You have to invest for the long term, focus, and be willing to invest many resources”.
  3. 3. The advantage of being lastI n Brazil, the fierce battle in the arena of electronic commerce (see main article) has intensified with the arrival of global players competing with the locals who currently dominate the market. Wal-Mart joined the on-line battlein October 2008, and now it’s the turn of the French chain Carrefour, which inaugurated its e-commerce operation inMarch, along with the announcement of a rather ambitious goal: to take fifth place among the e-commerce playersin Brazil by the end of 2011. “Being the last to join has its benefits”, says Rodrigo Lacerda, director of marketingfor the network. “We can design the site based on a good diagnosis of everything that isgoing on, understanding the needs of the consumer and the latest trends, and offer a more Carrefour.com.brdifferentiated solution”. With a hefty investment of US$ 27 million, the group’s portalwas developed in seven months, using all of the concepts of the Web 2.0: users can get information about productsthrough descriptive videos, reviews written by other users, as well as blogs, chat rooms, and social networks. Amongother differentiated services, Carrefour’s virtual store in Brazil offers extended warranties for products and after-salesservice. The Brazilian platform, which is the first to be launched by the French company in an emerging country, willserve as a model for companies in other countries, such as Argentina, Colombia and China. In other countries, the decrease in in order to become stronger in the of Being Last chart).tourism – a consequence of the financial area of e-commerce. For example, What is really interesting in Brazilcrisis and the swine flu- hindered Walmart, which landed on the Brazilian is what might happen with Pão dehigher growth levels, one of the most e-commerce market in October 2008, Açúcar. This Brazilian retail giant hasimportant drivers of commerce activity states that it aims at doubling its recently acquired its rivals Ponto Frioin the Internet. The case of Mexico is digital sales in 2010. They are focusing and Casas Bahia and has becomecrystal clear; tourism accounts for their strategy on variety. The current not only the leader in retail sales,nearly 70% of B2C transactions. offer is 10,000 items, classified in 11 but it also reached an attractive categories, but the company wants position in e-commerce. This company,RETAILERS ON THE to reach 100,000 items, divided in which at the end of this survey wasOFFENSIVE! 21 sections by the end of this year. experiencing a review process of itsIn order to have a better understanding Walmart also has virtual stores in merger with Casas Bahia, decided toof the explosive growth of this channel, other countries, such as Chile, under concentrate the sale of hard goods viayou must take a look at Brazil. Not the name of Lider, and in Mexico, with the Internet with a new player calledonly is it the biggest country in Latin Superama -but both of them only sell Nova PontoCom. With an estimatedAmerica, Brazil also has the highest groceries. Carrefour Brazil, which has sales volume of US$1,000 million forusage indicators in the region. An just launched its e-commerce portal, 2010, the operation was launchedadvantage that grew in 2009 with the has a similar plan (see The Advantage already occupying second place in thearrival of 4.4 million new Internet usersto the country, which contributed toelevate B2C figures over US$13,000 CONfIDENCE gOES hIghmillion - nearly 61% of all e-commerce How do yo perceive security in the operations that you realize in the internet? Only High and Very High, as % of totalfocuses on consumers in the region. Sources: AméricaEconomía readers survey, May of each year“Our conservative growth estimation is 2008 201030% annually in this segment until 2016”, 80%says Gerson Rolim, executive director 70% 60%of Camara-e.net, the association that 50%brings together Brazil’s e-commerce 40%operators. 30% Rolim is not alone in his optimism 20% 10%about Brazil. It so happens that the big 0%retailers have dramatically increased LATAM ARgEnTInA COLOMBIA COSTA RICA CHILE ECUADOR MExICO PAnAMA PARAgUAY PERU URUgUAY VEnEZUELA BOLIVIA BRAZILtheir technological and logistic bets
  4. 4. Brazilian e-commerce segment just the best sellers bought online. Sales demand is not yet there. In Colombiabehind B2W (the consortium formed by grew by 137% from 2008, and are and Peru, the investment by retailthe integration between Submarino.com positioned just behind the traditional operators is recent and is dominatedand Lojas Americanas). Unfortunately, categories, like books, newspapers by a few players. Only Chile, the secondB2W has seen its advantage dwindle two and magazines subscriptions, and country which features more maturityyears in a row since 2009 experiencing personal care products (health, beauty in e-commerce in the region, displaysgrowth below the industry average and and medicines). significant developments in a sectorreducing its market share from 60% to Brazil’s retail outperfoms other dominated by Falabella.com (see From47% in Brazilian retail. B2W will invest Latin American markets. In Mexico, Logistics to Social Networks case) -around US$100 million in technology elpalaciodehierro.com is the leader, Cencosud, Ripley, Sodimac and LaPolarin 2010 to reverse the trend. though it’s a market that has not yet have significant presence. A novelty in Brazil: for the first bet big on this channel. In Argentina,time, home appliances appear among there are successful models, but the THE BEACON FOR SMALL AND MEDIUM COMPANIES To be a relevant player in the area ofOn the logistics of social networks e-commerce, it requires a good deal ofI f you take a close look at Falabella’s annual report, the Chilean department store, you won’t find any investment in technology and logistics references to its web site. nothing! no business plan - not a single number. Sources within the in order to have an efficient distributioncompany explain that this secrecy is due to success: the advantage that Falabella.com holds over its process for the products sold. It iscompetitors is so large, that the company doesn’t want to make any effort to reveal the drivers of its impossible to reach sales of US$100good results for this channel. “It’s considered to be confidential information”, says Ricardo Alonso,general manager of Falabella.com, who nonetheless admits that sales through his web portal are higher million unless there are substantialthan for any Falabella store in the country. Sources close to the company say that the company’s and sustained financial commitmentsinternet sales represent 57% of those for the entire retail industry, and this market share can be from one or various players.confirmed by comparing on-line traffic data gathered by sites such as Alexa.com and googleTrends.com. Small sized companies can get good Estimates by informed market sources show that Falabella. results as well. As search engines com brings in 9% of the entire sales volume for the chain in the country, which is roughly US$ 142 million. Alonso become the main research tool for won’t confirm those numbers, but he does provide a little Internet users, small businesses more information about key factors for Falabella.com. start having as many chances as big “The buying experience is crucial”, he says. According to chains when the time comes to make Alonso, just having a good on-line catalogue isn’t enough. a purchasing decision. This is further Logistics is also central to the user experience. “It isn’t just about having delivery trucks, but also about having facilitated by sites like MercadoLibre. intelligent routing systems, systematic integration for com, a portal that came to life offering tracking orders on-line, and consumers the possibility to auction cargo loading systems, he says. their merchandise. Now, 90% of its Falabella.com One key area where many have sales have a fixed price and 80% are failed is in reverse logistics: the process that lets a buyer return an unsatisfactory new goods. This shows the large product. “It’s a tremendously complex process, but not presence of small scale businesses doing it well, can kill an e-commerce business”. In Chile, on that platform. as in most of Latin America, there are no logistics services One of the positive side effects suitable for electronic commerce that permit round-the- of e-commerce is that it generates clock deliveries at reasonable rates, for all types of goods.So Falabella has had to put together its own model, following the example of successful e-retailers in incentives for those companiesthe USA and Europe, which Alonso is always visiting. Another basic factor is continuously observing that operate informally to enter thethe user. “We are always watching and measuring what the user is doing on the site - everything”, he legal world. This is the case withsays. The continuous observation strategy even extends to social networks. They have created a social Mercado La Salada, an importantnetworking committee to take advantage of these two-way communication channels with customers, textile center in Buenos Aires, whichsuch as Facebook and Twitter, where they conduct a lot of activities and promotions for their followers.In addition to Chile, Falabella.com also operates in Argentina, and will soon open in Colombia and Peru, released MercadoLaSalada.com, orwhere the current sites are only informative, not transactional. the Las Malvinas technology fairs (Malvinasperu.com) and Computiendas
  5. 5. The role of ownersT he owners’ vision and support for electronic commerce is essential for creating a successful strategy. Just ask the executives of the internet unit at the Colombian grupo Éxito (the largest retailer in the country) which was bought by the French supermarket chain Casino in 2007.Casino operates affiliates in various countries around the world, among them Brazil. “We started our on-line operation in 1998, but it was asmall and rather un-ambitious unit, working out of a tiny office inside the company”, says Eduardo René Miranda, Head of Electronic and HomeCommerce at grupo Éxito. “But today, since Casino took over, we live and breathe Internet”. An important part of this Grupo Éxitochange in mindset was the experience provided by Casino from its on-line portals in Europe and Brazil where its affiliate,the Extra chain of department stores, operates the Extra.com.br portal. Having direct access to the experience of models in countries with socio-economic situations similar to that of Colombia, drove more purpose into the group, which is now preparing a series of investments for renovatingits on-line sales channel - particularly in the technological area where there are several bottlenecks at the moment. “… the fact is that we haveto step up. Annual Internet sales at Éxito were in the region of US$ 15 million in 2009, barely 0.8% of the sales of the entire group. Sales throughExtra.com are around 5% of the total sales of the affiliate”, says Miranda.(Computiendasperu.com), in Peru. with the highest growth levels. where most purchases in American“Small and medium size businesses Despite the costs of logistics and stores originate. Many Mexicans shophave much to gain with electronic Customs, there are an ever rising directly from Amazon and eBay, notcommerce because of its visible number of Latin American consumers having to go through an intermediatebenefits, potential to access to new who are using the Internet to shop service. Industry experts estimate thatmarkets and the dynamic nature of for products that are not found in this volume represents a third of thethe channel that’s so similar to their their countries. “When the iPhone whole e-commerce in Mexico. Actually,business models” says José María was released in 2007, we received the direct competition from the US isAyuso, Global Products Executive from an enormous quantity of orders for one of the factors which have inhibitedVisa. “In those countries with more the new gadget from Latin America”, Mexican companies from growing inrobust financial and technological says Paul Gartland, CEO at SkyBox, e-commerce.infrastructure we can already find a logistics company based in Miami In Central America and themany success stories”. which receives goods bought in the Caribbean, there are also shoppers US and sends them to their Latin in foreign sites due to their proximityGOODS THAT American buyers. “In 2009, we made to the US, and their reduced markets.GO ACROSS BORDERS 150,000 shipments for products from These consumers are used to shoppingAn iPad, an Android cell phone, or the the US to Latin America - a rise of 18% at international sites and speaklatest PC by Sony: Perhaps, they are in 2008, despite the crisis”. English making the purchase evennot available yet at your local store, but Because of its logistics integration more natural. with the US, Mexico is the country If there ever was a country well- Brazil does tOtAL e-consumption Selected countries/regions the 61% of the In US$ millions US$ Source: América Economía Intelligence whole B2C in BRAZIL 2005 2,269.9 2006 3,540.5 2007 4,898.7 2008 8,572.6 2009 13,230.4 the region MÉXICO 567.1 867.6 1,377.0 2,010.0 2,624.9 VENEZUELA 253.4 489.6 821.5 787.8 906.1you can purchase them directly from ARGENTINA 281.3 378.1 561.5 732.8 875.0 CHILE 242.8 471.8 687.5 919.5 1,027.9the US, at the most popular websites, EL CARIBE 387.0 565.0 660.0 754.9 868.1like Amazon or eBay. This type of COLOMBIA 150.3 175.0 201.3 301.9 435.0online shopping where consumers go PUERTO RICO 344.0 384.3 445.0 489.8 587.8for products which are unavailable at OTROS 131.3 164.8 203.0 260.9 306.5e-commerce sites in their countries CENTRAL AM. 189.2 359.9 499.0 563.9 637.2is significant. As a matter of fact, it PERU 109.1 145.5 218.2 250.9 276.0is one of the aspects of e-commerce LATAM + CARIBE 4,885.0 7,542.1.8 10,572.5.1 15,645.0 21,774.9
  6. 6. The monthly purchase The H1n1 swine flu was good for business at LeShop.com.ar. The portal was created in the year 2000 for the purpose of becoming a center for selling food and groceries on-line to eliminate the need for consumers to go to the supermarket. The business swelled when the swine flu pandemic quarantined the main cities of Argentina in July 2009. Many people chose to buy their daily needs over the Internet, with LeShop being one of the favorite sites, causing a growth rate of 50% last year. Achieving this rate in a market that is still wary of e-commerce was due to two fundamental factors: its own logistics and its personalized customer service. “We understand that, in order to increase our market share and build up customer loyalty, these two factors are the key to building confidence – it allows us to have a personal service and break the barriers of distance that are inherent to the virtual business” says Leshop.com.ar gonzalo Tomás Benítez, executive director of LeShop. The “internet supermarket”, as the company calls itself, is said to have 35% market share among on-line supermarkets, an industry which was estimated to be worth some US$ 65 million in 2009. This company, which replicates the Swiss company with the same name, has a portal that simulates a stroll through the supermarket - even down to the isles and shelves. The objective is to facilitate a change in habits at the time of doing the household shopping. For this, they assign a personal advisor to each customer who introduces himself by name and can be consulted regarding any concern, order change, or special requirements. “We want the buyer to feel the warm and pleasant service of the typical corner store because the customer who buys over the internet is a demanding customer who values quality, timeliness, and the precision of each order”, says Benítez.known for its international shopping, government not surprisingly, reduced made stores like TiendasElektra.com,it is Venezuela. In 2007 the Venezuelan that limit to US$400, increased the which belongs to the Salinas Groupgovernment allowed a US$1,500 official exchange rate and toughened in Mexico, and PriceSmart in Centralcredit limit (the Cadiviallocation) to whoeverwanted to use make International shopping is about a third of thepurchase via the whole e-commerce done in Mexico.Internet with theircredit cards. The Cadivi allocation the requisites to access those dollars, all America and the Caribbean, developcaused a lower exchange rate (subsidy) of which reduced these operations. special services for those internationalfor Internet transactions causing However, if international purchases shoppers.a massive shift to international drop in Venezuela, they go up intransactions via the Internet. The Brazil. Even though some tariffs on FLYING HIGH electronic products may reach 100%, Much of the e-commerce’s momentum BrAzILIAN pOwErhOuSE the exchange rate enriched in the region is being led by the tourism Total spending in Brazilians have taken advantage industry, especially airlines. This drive e-commerce per country of the higher value of their has nothing to do with revolutionary Source: América Economía Intelligence currency to buy on the Internet offers from low cost airlines, like ARgEnTInA OTHERS 4% many of the products that are Brazilian Gol, Volaris in Mexico or Aires 1% CARIBE not available in their country. in Colombia. In the past few years, the 4% According to Camara-e.Net, in biggest effort has come from long CEnTRAL AMERICA 3% 2009, Brazilians spent US$620 established players which have made VEnEZUELA million through by this mean, great investments to encourage the 4% 30% higher than in 2008. direct sales of tickets through thePUERTO RICO3% BRAZIL Cross border purchases is a Internet. The Chilean originated Lan, PERU 61% 2 way street: many immigrants with its website, Lan.com, has been one 1% to the US have replaced the of the most aggressive players in this MExICO 12% cash they send to their families battle: by offering strong promotional in their countries of origin campaigns in order to attract travelers to and prefer to shop directly in buy directly on its portal and bypassing COLOMBIA 2% CHILE the e-commerce sites where any agency that gets a commission on 5% their relatives reside. This has the sale of tickets. In the region, the
  7. 7. Brazilian airline Gol is still the airline are no physical goods to be delivered remains predominantly an offline regionwhich features the most sales on the – it simply relies on the consumer’s many people still not using bankingInternet with over 90% of its revenue trust, as the purchase involves high services. Many factors remain whichbeing generated through this channel ticket items. An average ticket in the must evolve to reach the e-commerce(though many of them cannot be tourism industry is worth US$900 for a levels in more developed countries.considered direct, as they are made by seat on a plane, and US$400 for hotel For instance, there are challengesthe travel agencies themselves using reservations, according to Despegar. to be resolved in the IT mechanismsthe airline’s portal). com’s figures, which requires high of transactions in many countries, The novelty however, is that there credibility and reliability rates to make which results in additional redtape orare small and medium companies from the transaction. complications for online operations.the industry sector which are starting Logistics and mail services are alsoto use e-commerce successfully to BOTTLENECKS highlighted as important obstacles formake their transactions. It may be Despite its high growth, Latin America the completion of projects. Brazil as ana company that provides transportto tourists on the Mayan coastline in COMpuLSIVE CONSuMErSMexico, like CancunTransfers.com, or Have you shop through the internet in the last 30 days? Only positivea resort in the Caribbean, or a hostel answers, % of the population. Source: TGI/KMRin Machu Picchu. “Nowadays, 70% 8,0% 2007of hotel reservations are carried out 7,21% 2008 7,0% 6,58% 2009online”, says Alvaro Dago, director for 6,14%Latin America of the Intercontinental 60%Hotels Group, which includes brands 5,0% 4,28% 4,01%like Holiday Inn. “Although brand loyalty 3,75% 3,72% 4,0% 3,4% 1,75%is relevant in this industry, Internet has 3,1% 2,94% 3,07% 2,76% 3,0% 2,8% 1,62% 2,63% 2,40%allowed smaller companies to become 1,96% 1,89% 2,0% 1,78% 1,81% 1,77%well-known and gain positions”. 1,34% 0,71% 0,94% 1,00% The travel industry for the most part, 1,0% 0,28%does not have the logistical problems of 0,0%online retailers primarily because there ARgEnTInA BRAZIL CHILE COLOMBIA ECUADOR MExICO PERU VEnEZUELA LATAMFans’ euphoriaT he Aerosmith concert in Colombia was scheduled for May 20, but in Eduardo Olea’s office in Bogota, the frenzy began long before. To be more precise, it started at exactly 0:00 on Saturday March 13, when concert ticket sales opened on theTuboleta.com portal, owned by Colombian company Coltickets, of which Olea is the research and development manager. “Atthat instant we had 85,000 people fighting for 10,000 tickets, from their computers... at one point there were about 110,000people.”, says Olea. “There were too many hits, too much information, and the system went down for a while”. He recognizesthat euphoria for the concert overwhelmed the portal’s technological and payment systems, which is why they are now makingsignificant investments in strengthening their computer system so it can handle such large volume of transactions. Theon-line business actually consists of managing euphoric runs. “Internet is the preferred channel forbuying tickets for large events with great expectations, such as soccer finals and major concerts, TuBoleta.comwhere everyone wants to buy the best seat before everyone else”, he says. And he should know,since his company is the principal ticket sales organization in the country. They also have presencein Peru and Ecuador and sell through various channels: two in-person channels (with 70 points of sale, as well as variousticket booths at theaters and stadiums) and two remote channels (telephone and internet sales). Of the total number oftickets sold by Tuboleta in 2009, 49% went through remote channels while 22% of the total was by Internet. However, themost expensive tickets are sold by Internet. While the average price of all tickets sold through all channels is US$ 15, theaverage for those sold through Tuboleta.com is around US$ 30. In 2009, the total for tickets sold by the on-line channel wasaround US$ 20 million. The Colombian company also has ticket sales in Ecuador however, internet ticket sales are almostirrelevant unlike In Peru, where the business is growing. “In Peru we sold 10,000 tickets in 2009 and this year we expect tosell around 15,000, but the channel in that country is barely 25% of the remote channels”, says Olea.
  8. 8. Agency take-offU se sales prices as if they were a traditional consumption product. This was one of the ideas of Despegar.com when it launched its Despegar.com Outlet Hotels initiative, after it convinced a group of hotels in the tourist areas ofArgentina to reduce their rates by 50% and anticipate sales for the January-February 2010 season sales through theportal. This isn’t an isolated idea: a few years earlier, the on-line travel agency, which was founded in the nineties,sought to increase the market share of hotels and tour packages in its sales portfolio. They understand they neededto aim for a higher value sector, such as the sale of hotels and tour packages either from external tour operators or setup by themselves. “The idea is that in a few years, this will account for 50% of our sales”. Even though airline ticketsaccount for 80% of their transactions in the tourism industry, they no longer offer the profit levels of a few years agosince the airlines are trying to use Internet to strengthen their own direct sales models and have reduced commissions toagencies. This type of change has generated a lot of pressure in the travel agency industry. “It’s a business that continuespaying only if you are big”, says Argentinean Cristian Vilate, co-founder and VP of HotelesDespegar.com for Latin America. “That’s where we have the advantage since we are currently Despegar.comamong the largest three travel agencies in the region and we will soon be number one”. Thecompany is actually experiencing very high growth rates of around 90% annual, which allowed itto close 2009 with a transaction volume of approximately US$ 500 million (the base over which they receive commissions)- they expect to close 2010 with sales of around US$ 900 million. “For the year ending in April, sales totaled around US$700 million”, says Vilate. Despegar.com has put efforts into Mexico and Argentina, then Brazil, Chile, and then Peru,Colombia, Central America and the Caribbean, where they just recently started operations. In all of these areas they havetaken advantage of the scales provided by an industry that is still highly fragmented. The Brazilian market, where theyoperate under the brand name “Decolar.com.br”, is their largest market accounting for more than 40% of their entirebusinesses. In that country, they are surpassed only by SubmarinoViagens.com, the tourist branch of the Brazilian giant B2W. Mexico is its second market, representing20% of all sales, then Argentina with 15%.exception, which has a high-level mail experiences when compared to progress will make it possible to expandservice, the countries in this region have traditional shopping. This, in addition the volume of goods and servicesinefficient and costly mechanisms for to the distrust felt by a large number which are moved by our economiesdistributing goods. These inefficiencies of people, creates obstacles. However, along the most efficient informationmake it necessary for many companies they can be overcome and each new highways.to set up their own logistics. In the USthis practice is unimaginable, where METHODOLOGY Intelligence prepared its own estimatesfirms like DHL, UPS and FedEx are the Estimates by AméricaEconomía by taking into account other variablesstores’ best partners. Intelligence in preparing this study related to electronic channel sales. For Furthermore, significant investment for the years 2008 and 2009 were the purposes of this study, we definedhas to be made in technology for based on information provided “consumer e-commerce (B2C)” tocompanies to offer services that by the official sources for each be those commercial transactionsreally generate a differentiated user country (e-commerce chambers or which are conducted over the associations).The information was internet, and which end with at least aELECtrONIC MONEY categorized and supplemented with purchase order whose final recipientPrefered payment system online industrial analysis and financial reports is a private individual. With thatFuente: TGI/KMR from large companies and experts, definition, we included transactions CREDIT CARD executed between consumers and 75% and two surveys: the TGI 2009 survey by KMR, which was conducted on retail companies, tourism companies DEBIT CARD and airlines, between consumers 13% a representative sample of 24,433 interviewees in eight countries (C2C), and also transactions with the CASH 7% across the region during 2009, and a government (on-line tax payment). survey conducted on-line last May by The amounts in dollars were obtained TRAnSFER 3% AméricaEconomía, of 2,300 readers. using the exchange rates for the last For those countries which do day of each relevant year. CHECk 1% not have organizations that estimate The English version of this 0% 10% 20% 30% 40% 50% 60% 70% 80% these purchases, AméricaEconomía document was edited by Visa.

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