2. Doing Business In Latin America The Economy
For Large Enterprises Background: Military rule and populist economic policies
Moving e-commerce beyond Amazon staples like books, DVDs, created instability in Latin America for much of the second half of
and music CDs will require increased consumer trust of online the twentieth century. A debt crisis that started in 1982 threw the
payment methods and delivery systems. Offering pickup and region into recession and triggered political changes as military
return services for goods through retail outlets can help overcome governments fell and economic policies became less nationalist
delivery worries, while payment services providers may consider and more market-oriented. A re-emergence of populist and
affiliating with specific sites. Since bank-issued credit cards are a nationalist sentiment, fuelled by sluggish growth and increasing
popular online payment method, statement inserts or online political alienation, has become a source of concern.
banking notices can help remind users of fraud liability limits and
Political structure: With the exception of Cuba, all countries have
other card protections.
democratically-elected governments, most with strong presidencies.
Although there is little risk of a return to military rule, confidence in
For SMEs institutions and the political class has fallen in the past decade
As many as a third of Latin American Internet users go online at reflecting economic underperformance and falling standards of
Internet cafes. Nearby small businesses may consider advertising living.The loss of support for mainstream parties is leading to more
there, especially if they sell goods that are researched online but difficult legislative environments and has fuelled instability in several
not often purchased online, like food and clothing. countries, most recently Bolivia, Ecuador and Venezuela. Colombia
remains in the grip of a decades-long guerrilla conflict.
For Online Marketers and Ad Agencies
With online advertising spending growth in Latin America Policy issues: Import-substituting industrialization policies were
outpacing that for traditional ads, now is a good time to be in the abandoned in the 1980s and 1990s, when trade and investment
interactive space. Online purchases follow online research, so regimes were liberalized across the region. Most countries now
information-rich campaigns may still be effective even without a have floating exchange rate regimes, usually supported by an
inflation-targeting framework. Government finances remain weak in
heavy push to complete the transaction online. Beware flashy or
many countries despite reforms. Although Latin America has made
potentially annoying ads, which may distract online browsers, as
a large adjustment in its external accounts in recent years, its high
these are reviled even more than spam in Latin America. Of
level of loans from other countries and a rising stock of foreign
course, since broadband users are still in the minority, rich media
direct investment, which sends profits abroad, mean that its
ads are not the best mass market approach anyway.
external financing requirement remains high, leaving it exposed to
the international liquidity cycle. The region also remains heavily
dependent on primary commodities exports, leaving it vulnerable to
trade fluctuations. The long-term policy environment for foreign
investment will remain insecure in many countries until widespread
unemployment and inequality—the root causes of instability—are
overcome. Low skill levels remain a major weakness. Many
countries in the region have become heavily dependent on family
remittances from emigrant workers, mostly in the US and Europe.
Taxation: Most regional tax systems rely heavily on indirect taxes
and royalties from minerals extraction. Efforts to raise generally
low levels of tax collection are often thwarted by a culture of tax
evasion and weak institutional capacity.
Foreign trade: The region has become more open, with exports
rising from 15% of GDP in the first half of the 1990s to over 20%
since 2000. The US remains the main export market for most
countries, although trade diversification has increased. China is a
growing market for the region’s raw materials’ producers. Mexico
accounts for around 50% of regional trade.
Note: Portions of this section were drawn from data and
analysis in the EIU’s ViewsWire service
http://www.viewswire.com
Latin America Online 2
3. Internet Access
After years of economic instability, two years of Even a cursory glance at the major countries within Latin America
reveals their dominant position in the region’s online environment.
growth in the region have contributed to Specifically, Argentina, Brazil, Chile, and Mexico accounted for 79%
broadband growth in the key markets of Latin of all Latin America’s Internet users as of 2005.
America. Mexico and Brazil serve as drivers for the
Internet Users in Select Countries and Regions
entire region. Telmex in Mexico and Brasil Telecom Worldwide, 2005 (millions)
Number of people with Internet
both experienced broadband subscriber growth of Internet access* users**
US 205.8 175.4
over 80% in 2005. If relative regional stability
Canada 22.0 18.5
continues, Latin America is likely to become an North America 227.8 193.9
important player in the global digital landscape. France 26.4 20.9
Germany 48.6 36.6
Leading Broadband Access Providers in Latin Italy 28.5 22.2
America, 2004 & 2005 (thousands of subscribers and Spain 17.4 11.9
% increase/decrease vs. prior year) UK 37.9 28.4
Country Tech- 2004 2005 % European Union 232.9 188.1
nology change
Total Europe 292.1 233.3
Telemex Mexico ADSL 560 1,033 84.4%
EMEA 334.0 275.6
Telesp Brazil ADSL 826 1,207 46.0%
Argentina 10.0 5.8
Brasil Telecom Brazil ADSL 536 1,014 89.2%
Brazil 25.8 21.8
Telemar Brazil ADSL 496 805 62.3%
Chile 5.6 4.7
Telefonica del Peru Peru ADSL 200 340 69.8%
Mexico 17.1 15.6
Telefonica CTC Chile Chile ADSL 201 314 56.5%
Total Latin America 74.9 60.5
Telefonica de Argentina Argentina ADSL 190 304 59.6%
Australia 14.1 12.1
VTR* Chile Cable 215 240 11.6%
Internet China 132.8 111.0
Cablevision Argentina Argentina Cable - 213 - India 50.6 27.7
Internet Japan 86.3 75.7
Telecom Argentina Argentina ADSL 81 162 100.0% South Korea 33.9 33.1
Entel Chile ADSL & WLL 59 55 -5.8% Total Asia-Pacific 384.2 315.4
Multicanal Argentina Cable - 55 - Worldwide 1,020.90 845.4
Internet
Note: *eMarketer estimates based on Nielsen//NetRatings and ITU
Total - - 3,365 5,743 70.7%
estimates; **eMarketer defines an Internet user as someone aged 3+
Note: *eMarketer estimate accessing the Internet at least once per month
Source: company reports, 2005 & 2006 Source: eMarketer, May 2006
072641 www.eMarketer.com 072587 www.eMarketer.com
072641 072587
Latin America Online 3
4. Internet Access
Broadband Broadband Subscribers and Broadband Households in
Latin America’s share of the world’s broadband user base is tiny, Select Countries and Regions Worldwide, 2005
according to a March 2006 by Point Topic, which found that Latin (millions)
Broadband Broadband
America’s broadband subscribers accounted for only 3% of the subscribers households
global total. (all lines) (2)
(1)
Breakdown of Broadband Subscribers Worldwide, by US 49.4 (3) 43.7
Region, Q4 2005 (% of total) Canada 6.7 (3) 6.5
North America 56.1 (3) 50.2
Western Europe 26%
France 10.0 8.9
North America 26% Germany 10.7 9.1
Asia-Pacific 24% Italy 6.7 5.8
Spain 4.8 4.2
South and East Asia 18%
UK 9.8 9.0
Latin America 3%
Total Western Europe 57.5 50.7
Eastern Europe 2% Total EMEA 67.5 59.5
Middle East and Africa 1% Argentina 0.8 0.7
Brazil 3.3 3.1
Source: Point Topic, March 2006
073233
Mexico 2.3 1.9
www.eMarketer.com
073233 Total Latin America 8.2 7.3
The same study also featured numerical counts of broadband Australia 2.7 2.4
subscribership in Latin America, along with the major individual China 37.5 34.1
countries in the region. eMarketer found that Latin American India 0.8 0.8
Japan 22.1 20.8
broadband households make up a similarly small percentage of
South Korea 12.2 11.7
the worldwide total, with 3.8%.
Total Asia-Pacific 83.4 77.6
Worldwide 215.4 (4) 194.6
Note: A broadband subscriber is any business, household, organization or
individual that has paid for a broadband Internet connection; a broadband
household is a measure of only residential households with a broadband
connection
Source: (1) Point Topic, March 2006 unless otherwise stated; (2) eMarketer,
May 2006; (3) OECD, March 2006; (4) eMarketer, May2006
072607 www.eMarketer.com
072607
According to a June 2006 study by PriceWaterhouseCoopers and
Wilkofsky Gruen Associates, Brazilians spend the most money in
total on broadband access in Latin America, and will continue to
do so through 2010.
Broadband Access Spending in Select Countries in
Latin America, 2004-2010 (millions)
2004 2005 2006 2007 2008 2009 2010
Argentina $184 $348 $515 $662 $777 $891 $1,002
Brazil $254 $414 $626 $887 $1,153 $1,405 $1,641
Chile $74 $129 $149 $168 $186 $203 $219
Colombia - - - $12 $23 $40 $51
Mexico $184 $297 $399 $478 $535 $572 $605
Venezuela - - $16 $32 $48 $69 $92
Total for 6 $696 $1,188 $1,705 $2,239 $2,722 $3,180 $3,610
countries
Source: PricewaterhouseCoopers (PwC), Wilkofsky Gruen Associates, June
2006
074062 www.eMarketer.com
074062
Latin America Online 4
5. Internet Access
Although Latin America has fewer broadband subscribers than
any other region in the world, subscribership is growing at a
“Several countries in Latin America are
healthy rate, according to Morgan Stanley and company reports leapfrogging dial-up altogether, so the
released in March 2006. region’s growth curve in broadband
adoption may be far steeper than in the US
Broadband Subscribers* Worldwide, by Region, and other regions.”
1999-2006 (thousands and % increase vs. prior year)
—Ben Macklin, eMarketer Senior Analyst
2000 2001 2002 2003 2004 2005 2006
072671
North America
Subscribers 7,525 14,550 20,484 28,880 38,740 49,848 59,610 Internet Users and Broadband Households in Select
% increase 203% 93% 41% 41% 34% 29% 20% Countries and Regions Worldwide, 2005 (millions)
Europe
Asia-Pacific
Subscribers 983 2,872 9,966 24,693 42,225 60,301 - 315.4
% increase - 192% 247% 148% 71% 43% - 77.6
Japan
Europe
Subscribers 625 2,836 7,806 13,641 18,295 22,346 - 233.3
% increase - 354% 175% 75% 34% 22% - 55.2
Asia-Pacific
US
Subscribers 4,351 10,707 16,991 28,836 44,115 69,896 - 175.4
% increase - 146% 59% 58% 64% 58% - 43.7
Latin America
China
Subscribers 41 324 1,304 2,259 4,324 6,588 - 111.0
% increase - 689% 303% 73% 91% 52% - 34.1
Note: *primarily residential
Latin America
Source: Morgan Stanley, company reports, March 2006
074069
60.5
www.eMarketer.com
7.3
074069
eMarketer’s calculation of broadband subscriber growth, based Canada
specifically on Argentina, Brazil, Chile and Mexico, was an even 18.5
6.5
higher 70.7%
Worldwide
Broadband Subscriber Growth* in Select Countries 845.4
and Regions Worldwide, 2005 vs. 2004 194.6
Latin America 70.7% Internet users Broadband households
Western Europe 42.2% Note: eMarketer defines an Internet user as an individual aged 3+ who
accesses the Internet at least once per month; a broadband household is a
Asia-Pacific 37.7% measure of only residential households with a broadband connection
Source: eMarketer, May 2006
US 27.7% 072671 www.eMarketer.com
Canada 18.3%
Latin America’s steep broadband growth bodes well for paid
Note: *growth represents broadband subscriber additions during 2005 content as well. An April 2006 Frost & Sullivan study estimated that
among the leading broadband access providers in those particular
countries or regions revenue from such content would reach $234.5 million in 2011, up
Source: eMarketer, May 2006 from $87.1 million in 2005.
072670 www.eMarketer.com
072670
Paid Broadband Content Revenues in Latin America,
As a point of comparison, the US has nearly three times the 2005 & 2011 (millions)
number of Internet users as all of Latin America, and nearly six
2005 $87.1
times the number of broadband users.
2011 $234.5
Source: Frost & Sullivan, April 2006
071755 www.eMarketer.com
071755
Latin America Online 5
6. 072600
Internet Access
Internet connectivity among businesses in Latin America trails the Broadband Household Penetration in Select Countries
US not only in sheer numbers, but in connection speeds as well. in Latin America, 2005 & 2010 (% of total households)
While over 90% of large US businesses are connected to the Chile
Internet, no more than two-thirds of Latin American businesses of 13.9%
any size were connected to the Internet as of July 2005 according 29.6%
to Momentum Research Group. Internet-connected businesses in Mexico
Latin America typically connect at low-speed DSL rates of 7.7%
128kbps-768kbps. 28.5%
Argentina
Connected Organizations* in Latin America, by Size 7.2%
and Internet Access Technology, 2005 (% of total in
18.8%
each group)
25-99 100-499 500+ Total Brazil
Dial-up service (<64 kbps) 21% 15% 9% 15% 6.8%
19.8%
Broadband, such as ISDN, DSL or frame relay 56% 65% 60% 62%
(128 -768 kbps)
2005 2010
Broadband, such as E1, E3 or Ethernet 12% 14% 22% 15%
(1.544+ mbps) Note: includes ADSL, cable, satellite, fixed wireless, fiber, powerline, WiMAX
and emerging broadband technologies accessed at home
Don't know/refused 12% 6% 8% 8% Source: eMarketer, May 2006
Note: n=1,212 (total); numbers do not add up to 100% due to rounding; 072648 www.eMarketer.com
*defined as having a network with enterprise software
Source: Momentum Research Group, July 2005
Broadband Households in Select Countries in Latin
071337 www.eMarketer.com America, by Access Technology, 2005 (thousands)
071337
ADSL Cable Other* Total
The following charts represent eMarketer’s Internet user and Argentina 420 315 6 741
broadband household projections for Argentina, Brazil, Chile Brazil 2,685 400 24 3,109
and Mexico. Chile 310 245 15 570
Mexico 1,210 625 15 1,850
Internet Users in Select Countries in Latin America, Total for 4 countries 4,625 1,585 60 6,270
2004-2010 (millions and penetration)
Note: *includes fixed wireless, fiber, powerline, WiMAX and emerging
2004 2005 2006 2007 2008 2009 2010 broadband technologies accessed at home
Argentina 4.9 5.8 6.7 7.6 8.4 9.3 10.3 Source: eMarketer, May 2006
072649 www.eMarketer.com
% of population 12.5% 14.7% 16.8% 18.9% 20.6% 22.7% 24.9%
072645
072648
072649
Brazil 19.3 21.8 24.4 26.5 28.3 30.1 32.0
% of population 10.5% 11.7% 13.0% 13.9% 14.7% 15.5% 16.4%
eMarketer expects alternative broadband Internet access in the
Chile 4.3 4.7 5.0 5.4 5.7 5.9 6.2 region to increase significantly through 2010. In Brazil, nearly half a
% of population 27.2% 29.4% 31.1% 33.1% 34.8% 35.5% 37.1% million subscribers will access the Internet via broadband by some
Mexico 14.0 15.6 17.3 19.2 20.9 22.5 25.0 other means besides DSL and cable.
% of population 13.3% 14.7% 16.1% 17.7% 19.0% 20.2% 22.2%
Broadband Households in Select Countries in Latin
Note: eMarketer defines an Internet user as a person aged 3+ who
accesses the Internet at least once per month America, by Access Technology, 2010 (thousands)
Source: eMarketer, May 2006 ADSL Cable Other* Total
072600 www.eMarketer.com
Argentina 1,394 607 33 2,034
Broadband Households in Select Countries in Latin Brazil 7,995 909 489 9,393
America, 2004-2010 (thousands) Chile 800 409 80 1,289
2004 2005 2006 2007 2008 2009 2010 Mexico 5,613 1,589 129 7,331
Argentina 423 741 923 1,199 1,518 1,800 2,034 Total for 4 countries 15,802 3,514 731 20,047
Brazil 2,002 3,109 4,227 5,603 6,981 8,183 9,393 Note: *includes fixed wireless, fiber, powerline, WiMAX and emerging
broadband technologies accessed at home
Chile 450 570 702 835 992 1,129 1,289 Source: eMarketer, May 2006
Mexico 815 1,850 2,736 3,789 5,000 6,080 7,331 072651 www.eMarketer.com
Total for 4 3,690 6,270 8,588 11,426 14,491 17,192 20,047 072651
countries
Note: includes ADSL, cable, satellite, fixed wireless, fiber, powerline, WiMAX
and emerging broadband technologies accessed at home
Source: eMarketer, May 2006
072645 www.eMarketer.com
Latin America Online 6
7. Internet Access
Market research firm Pyramid Research estimated that Wi-Fi users Cybercafes in Mexico account for more Internet users (30%) than
in Latin America would grow by 54% through 2009, up to 8.3 the workplace (20%).
million users from the 2006 level of 4.5 million.
Internet Users in Mexico, by Access Location, 2005 (%
Worldwide Wi-Fi Users, by Region, 2004-2006 & 2009 of total)
(thousands)
2004 2005 2006 2009
School
Asia-Pacific 32,937 55,341 81,048 168,193 10%
Western Europe 16,681 24,877 33,546 63,746 Work
Central and Eastern Europe 2,109 3,172 4,383 9,875 20% Home
40%
Latin America 2,386 3,401 4,528 8,331
Africa/Middle East 287 664 1,096 2,747
Cybercafe
North America 20,570 30,235 40,454 74,174 30%
Total 74,969 117,690 165,056 327,066
Source: Pyramid Research, September 2005; BusinessWeek, October 2005 Source: AMIPCI, October 2005
071781 www.eMarketer.com
072557 www.eMarketer.com
071781
072557
As is the case globally, getting people to pay for Wi-Fi in Latin
The installed base of PCs in Mexico is less than a fourth of that of
America is a tough sell. Pyramid Research found that only 11%
mobile phones. This relatively low PC penetration presents a
of the predicted 8.3 million Wi-Fi users in 2009 would pay for
barrier to Internet access in the home; the cybercafé is often the
their access.
only means of access.
Worldwide Wi-Fi Paid Subscribers, by Region,
2004-2006 & 2009 (thousands) Installed Base of Select Internet Access Devices in
Mexico, 2005 (millions)
2004 2005 2006 2009
Asia-Pacific 765 1,950 3,540 9,585 Personal computers 10.8
Western Europe 333 921 1,747 5,118 Mobile phones 46.1
Central and Eastern Europe 14 45 102 461
PDAs 1.7
Latin America 46 135 262 769
Africa/Middle East 0 12 32 136 Source: AMIPCI, October 2005
North America 700 1,480 2,844 7,219 072549 www.eMarketer.com
072549
Total 1,858 4,542 8,528 23,286
Internet penetration is low in other Latin American countries, but
Source: Pyramid Research, September 2005; BusinessWeek, October 2005
071782 www.eMarketer.com
is expected to grow quickly thanks to infrastructure investment. A
071782 May 2006 study by Peruvian statistical agency INEI predicted
Internet penetration growth greater than 100% for 2005-2006.
Internet Access Locations
Beyond home, work and school, many Latin Americans access the Internet Penetration in Peru, 2005 & 2006
Internet via “Internet places,” which are cybercafés and
businesses where telecom companies provide Internet access. In 2005 1.73%
Argentina, 59% of respondents to a July 2005 study by D’Alessio 2006 3.93%
and Clarin.com named Internet places as the location they most Note: January-March of each year
often accessed the Internet. Source: Instituto Nacional de Estadistica e Informatica (INEI) - Peru, May
2006
074314 www.eMarketer.com
Most Frequently Used Internet Access Locations in 074314
Argentina, 2005 (% of respondents)
Internet place* 59%
Home 41%
Work 14%
University 3%
Note: *includes cybercafes and businesses where telecom companies
provide Internet access
Source: D'Alessio and Clarin.com, July 2005
074221 www.eMarketer.com
074221
Latin America Online 7
8. Internet Access Usage
Venezuela’s low aggregate Internet user numbers belie quick When asked what they like about the Internet by
growth. Market research firm Tendencias Digitales estimated
Venezuela’s Internet users in 2005 at 3.1 million, up nearly 50%
Tendencias Digitales in March 2006, most Latin
over 2.2 million in 2004. Americans said they like the amount and variety
of information available.
Internet Users and Penetration in Venezuela,
1998-2005
Internet users % of population
Most Popular Features of the Internet according to
Internet Users in Latin America, November
1998 207,000 0.85% 2005-January 2006 (% of respondents)
1999 526,000 2.18% Argentina Chile Colombia Peru Venezuela
2000 852,000 3.46% Amount and variety of 28.5% 21.8% 30.9% 35.9% 28.1%
2001 1,200,000 4.78% information
2002 1,585,000 6.31% Ability to obtain information 17.9% 22.1% 17.0% 19.3% 21.1%
quickly
2003 1,365,000 5.43%
Ability to communicate 14.4% 12.6% 12.0% 11.7% 17.3%
2004 2,200,000 7.07%
Easy access to information 4.9% 7.7% 14.8% 9.6% 9.7%
2005 3,100,000 11.66%
Global scope of information 8.7% 2.1% 6.4% 4.4% 5.4%
Source: Tendencias Digitales, February 2006
073978 www.eMarketer.com The present time of 4.9% 3.2% 4.4% 6.1% 6.5%
information
Internet Access Locations Used in Venezuela, Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru),
2000-2005 (% of respondents) n=445 (Venezuela)
Source: Tendencias Digitales, March 2006
Cybercafe* Home Work Training Information 073510 www.eMarketer.com
center center
June 2000 10.0% 35.0% 27.0% 21.0% 0.0%
Least Popular Aspects of the Internet according to
November 2001 23.0% 38.0% 15.0% 14.0% 3.0% Internet Users in Latin America, November
June 2002 35.0% 31.0% 18.0% 12.0% 6.0% 2005-January 2006 (% of respondents)
July 2003 49.0% 24.0% 17.0% 11.0% 12.0% Argentina Chile Colombia Peru Venezuela
December 2003 57.0% 19.0% 16.0% 9.0% 10.0% Spam 25.0% 18.9% 17.4% 21.9% 20.9%
October 2004 66.0% 20.0% 11.0% 10.0% 3.0% Viruses 16.8% 9.8% 18.7% 18.6% 14.2%
December 2004 66.0% 14.0% 12.0% 8.0% 5.0% Excessive publicity 10.6% 12.3% 13.5% 14.0% 16.9%
December 2005 65.0% 13.0% 18.0% 7.0% 4.0% Pornography 10.1% 9.8% 8.3% 10.5% 9.2%
Note: *Cybercafes include the Centers of Telecommunications of the Slow navigation 2.4% 6.7% 6.5% 8.2% 5.4%
telephone operators
Source: Tendencias Digitales, February 2006 Distrust in means of 1.4% 3.9% 5.6% 2.6% 2.5%
payment
073997 www.eMarketer.com
Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru),
073978
n=445 (Venezuela)
Source: Tendencias Digitales, March 2006
073997 073546 www.eMarketer.com
073510
073546
Latin America Online 8
9. Usage
As with Internet users worldwide, Latin Americans list e-mail as Online Activities among Internet Users in Mexico,
the main reason they use the Internet, according to the 2005 (% of respondents)
Tendencias Digitales study. Past 30 days More frequently
E-Mail 45% 21%
Main Reasons that Adults in Latin America Use the Listen to music 44% 24%
Internet, November 2005-January 2006 (% of Download music 43% 24%
respondents)
Play games online 43% 17%
Argentina Chile Colombia Peru Venezuela
Visit humor sites 40% 15%
Send and receive 47.3% 44.6% 56.2% 58.0% 35.1%
e-mail Sports 35% 15%
Look for general 8.2% 9.1% 6.2% 10.5% 19.1% Health 31% 13%
information Read local news 28% 11%
Look for 6.8% 3.9% 8.2% 7.9% 7.2% Get movie information 28% 10%
information for
work Source: AMIPCI, October 2005
In order to stay 9.5% 5.6% 1.5% 4.0% 7.6% 072560 www.eMarketer.com
up to date 072560
Look for news 6.5% 9.1% 2.3% 1.6% 6.3% E-mail is used by nearly all Argentinian Internet users, according to
To use instant 3.3% 4.6% 3.7% 2.3% 4.3% a July 2005 study by D’Alessio and Clarin.com. The same study
messaging
found that more than half of respondents also used the Internet to
Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru),
n=445 (Venezuela) talk with distant friends or relatives and look for school /work
Source: Tendencias Digitales, March 2006
information, among other activities.
073548 www.eMarketer.com
073548
Online Activities of Internet Users in Argentina, 2005
Respondents in the same study cited several of their favorite (% of respondents)
Internet activities. Common activities included visiting adult
Personal e-mail
web sites, video games, using VoIP blogging and participating in
, 98%
e-mail lists.
Look for information for school/work
89%
Popular Internet Activities among Internet Users in
Latin America, November 2005-January 2006 (% of E-Mail for work
respondents) 73%
Argentina Chile Colombia Peru Venezuela Talk with distant friends and relatives
Visit adult Web sites 26.9% 44.2% 38.5% 37.5% 28.3% 66%
Video games 30.4% 50.5% 33.3% 35.0% 33.9%
Entertainment
VoIP 24.5% 34.4% 33.0% 31.2% 26.1%
62%
E-Mail lists 28.0% 32.6% 24.4% 42.7% 33.7%
Download software to update programs
Have or participate in a blog 23.1% 37.9% 21.6% 27.5% 24.3%
59%
Bet online 1.4% 31.9% 2.6% 6.8% 3.6%
Chat
Online dating 5.7% 6.0% 5.6% 8.4% 5.2%
47%
Podcasts 2.2% 6.3% 2.6% 4.7% 2.7%
Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru), Download music
n=445 (Venezuela) 46%
Source: Tendencias Digitales, March 2006
073550 www.eMarketer.com Play games online
073550 22%
Mexican Internet users participate in a number of online activities, Find friends/relationships
according to an October 2005 study by statistical agency AMIPCI. 13%
Asked of their activities in the past 30 days, 40% or more Other
respondents said that they had visited humor sites, played games 8%
online, downloaded or listened to music and used e-mail. Source: D'Alessio and Clarin.com, July 2005
074213 www.eMarketer.com
074213
Latin America Online 9
10. Usage
The study also found heavier usage of several Internet Online Activities of Internet Users in Brazil, by Age
applications by respondents 25-34 compared to the rest of the and Gender, August 2005-September 2005 (% of
population. For instance, 73% of 25-34 year-old Internet users in respondents in each group)
Argentina had visited entertainment Web sites, compared to 47% Com- Training Informa- Leisure Interact Banking
municate and tion with or
of those 55 and older. education and govern- e-com-
services ment merce
Online Activities of Internet Users in Argentina, by Gender
Age, 2005 (% of respondents) Male 84.66% 51.86% 80.95% 75.56% 31.70% 21.70%
25-34 35-44 45-54 55+ Female 78.69% 61.03% 80.97% 66.69% 24.74% 13.66%
Download music 59% 41% 39% 22% Age
Play games online 22% 21% 52% 47% 10-15 64.01% 65.16% 56.78% 80.70% - -
Visit Web sites for entertainment 73% 63% 52% 47% 16-24 85.32% 63.43% 80.90% 76.07% 25.96% 29.59%
Download software 68% 61% 56% 40% 25-34 88.13% 48.87% 85.29% 70.19% 39.99% 29.59%
Chat 52% 41% 41% 41% 35-44 80.21% 49.24% 77.10% 68.14% 39.94% 18.15%
Source: D'Alessio and Clarin.com, July 2005 45-59 87.34% 36.96% 82.75% 59.11% 43.52% 18.15%
074215 www.eMarketer.com 60+ 84.02% 25.60% 72.53% 77.02% 47.21% 23.57%
074215
Note: n=2,085 who have used the Internet in the past 3 months
Using more general categories, in September 2005 Ipsos on behalf Source: Ipsos on behalf of Comité Gestor da Internet no Brasil (CGI),
September 2005
of CGI asked Brazilian Internet users about their Internet activity.
074330 www.eMarketer.com
70% or more respondents said they did some type of leisure 074330
activity online, as well as information, training, education and Latin America has high online banking usage, according to
communication activities. Tendencias Digitales. An average of 52% of Latin America Internet
users used online banking in 2005.
Online Activities of Internet Users in Brazil, August
2005-September 2005 (% of respondents)
Internet Users in Select Countries in Latin America
Communicate 81.67%
Who Use Online Banking, November 2005-January
2006 (% of respondents)
Training and education 56.45% Argentina Chile Colombia Peru Venezuela
Information and services online 80.96% Have used, and use at the 42.4% 58.6% 55.1% 51.0% 56.9%
moment
Leisure 71.25%
Have used, but do not use 10.3% 6.0% 14.0% 12.8% 12.8%
Government 28.22% currently
Have never used 47.3% 35.4% 30.9% 36.1% 30.3%
Banking or e-commerce 17.68%
Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru),
Note: n=2,085 who have used the Internet in the past 3 months n=445 (Venezuela)
Source: Ipsos on behalf of Comité Gestor da Internet no Brasil (CGI), Source: Tendencias Digitales, March 2006
September 2005 073656 www.eMarketer.com
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074327
Study respondents said that they banked online because it saved
them time in line, was open at all hours, and was fast, easy and free.
Main Reasons that Internet Users in Latin America
Use Online Banking, November 2005-January 2006 (%
of respondents)
Argentina Chile Colombia Peru Venezuela
Do not have to wait in line 87.8% 92.2% 93.2% 91.8% 88.5%
Unlimited hours 78.2% 92.2% 81.6% 81.3% 81.4%
Easy 68.6% 81.4% 77.6% 76.7% 77.9%
Fast 58.3% 82.0% 70.7% 76.3% 70.4%
Free 46.8% 58.7% 33.3% 68.5% 53.8%
Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru),
n=445 (Venezuela)
Source: Tendencias Digitales, March 2006
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073659
Latin America Online 10
11. Usage
One activity clearly stands out among Latin American Internet Computer accessories, consumer electronics, books, CDs and
users: they love to Instant Message (IM). Nearly two-thirds of DVDs are popular online purchases in Latin America, according to
users in a February 2006 study by comScore Networks reported Tendencias Digitales. Far less common are computer and other
using instant messaging programs—more than in Europe and electronics purchases.
North America.
Principal Items Purchased Online by Internet Users in
Instant Messenger Users in Europe, North America Select Countries in Latin America, November
and Latin America, February 2006 (% of Internet users 2005-January 2006 (% of respondents)
in each region) Argentina Chile Colombia Peru Venezuela
Computer accesories 38.6% 37.8% 40.0% 24.4% 39.9%
Latin America 64%
Books 44.3% 35.7% 24.7% 33.7% 31.3%
Europe 49%
CDs and DVDs 31.4% 34.7% 24.5% 28.0% 32.5%
North America 37% Vacations 23.8% 43.4% 24.2% 28.0% 32.9%
Source: comScore Networks Inc., April 2006 Tickets to events/movies 20.5% 25.0% 22.3% 13.5% 34.2%
072002 www.eMarketer.com Electronics 14.8% 10.7% 18.9% 7.8% 17.7%
072002 Computers and PDAs 10.5% 15.8% 17.7% 8.8% 18.1%
Clothing and accesories 16.2% 11.7% 14.1% 13.5% 20.2%
E-Commerce
Magazines and documents 19.5% 15.3% 8.2% 16.1% 11.5%
For a region trailing North America in broadband adoption, Latin Flowers 4.8% 16.3% 6.7% 25.9% 9.9%
America is doing just fine in e-commerce, according to an October Mobile phones 9.5% 7.1% 9.6% 9.8% 9.9%
2005 study by AC Nielsen. The study found that 31% of Internet Toys 2.4% 9.7% 5.1% 3.6% 5.3%
users had bought a book online during April or May 2005, 21% had Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru),
bought videos, DVDs, or games online, and 16% had made airline n=445 (Venezuela)
Source: Tendencias Digitales, March 2006
reservations online. Although the revenue associated with these 073643 www.eMarketer.com
purchases trails North America, the percentage of Internet users 073643
participating in these e-commerce activities nearly mirrored those In fact, when the same study examined e-commerce barriers,
to the North. The region does lag somewhat in online clothes respondents often mentioned a preference for buying in the store,
purchasing. Only 9% of respondents reported having bought clothes along with a distrust of online payment and delivery methods.
online in Latin America, compared to 22% in North America.
Barriers to E-Commerce in Select Countries in Latin
Online Purchases Made by Internet Users in Select America, November 2005-January 2006 (% of
Countries in the Americas, April-May 2005 (% of respondents)
respondents) Argentina Chile Colombia Peru Venezuela
Books Videos/ Airline Clothing Distrust in the means of 43.0% 40.4% 51.3% 50.4% 38.1%
DVDs/ tickets/ accessories/ payment
games reservations shoes
Prefer to buy in the store 40.5% 41.6% 39.6% 36.0% 37.1%
Canada 27% 21% 17% 17%
It isn't neccesary 22.8% 31.5% 26.6% 20.8% 32.7%
US 28% 22% 15% 25%
Do not have a credit card 22.8% 37.1% 21.2% 20.8% 27.7%
North America 28% 22% 16% 22%
Like the personal treatment 32.2% 22.5% 23.2% 24.2% 25.2%%
Brazil 45% 28% 15% 6% of a regular store
Chile 11% 13% 18% 8% Distrust in delivery of the 18.4% 16.9% 30.5% 31.4% 27.7%
Mexico 30% 20% 17% 13% product
Latin America 31% 21% 16% 9% Distrust the quality of the 25.3% 12.4% 31.2% 26.3% 20.8%
product
Note: purchased in month prior to survey
Source: ACNielsen, October 2005 Do not know how 3.8% 4.5% 5.4% 5.9% 5.4%
067816 www.eMarketer.com Note: n=368 (Argentina), n=285 (Chile), n=1,045 (Colombia), n=429 (Peru),
067816
n=445 (Venezuela)
Source: Tendencias Digitales, March 2006
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073654
Latin America Online 11
12. Usage
Latin America trails other global regions in the percentage of The study also found that slightly more Latin American males than
Internet users who have ever made an online purchase, according females made purchases online, whereas in North America the
to AC Nielsen. numbers were almost equal. The difference (8%) was slightly more
than the gender difference in Internet user levels for Latin America
Internet Users Worldwide Who Have Ever Made an overall (52% male, 48% female).
Online Purchase, by Region, April-May 2005 (% of
respondents)
Internet Users in Select Countries in the Americas
Europe 85% Who Have Ever Made an Online Purchase, by Gender,
April-May 2005 (% of respondents in each group)
North America 85%
Male Female
Asia-Pacific 70% Canada 80% 77%
South Africa 74% US 89% 88%
North America 86% 85%
Latin America* 63%
Brazil 85% 71%
Worldwide** 77%
Chile 51% 50%
Note: *Brazil, Chile and Mexico; **includes 38 countries Mexico 66% 55%
Source: ACNielsen, October 2005
Latin America 67% 59%
067785 www.eMarketer.com
Source: ACNielsen, October 2005
067785
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The same study found that Latin American online buyers
067811
made fewer purchases in April-May 2005 than online buyers in
US Internet retailers do not make a lot of foreign online sales to
other regions.
Latin American countries. This is likely because most US Web sites
are in English. Even discounting payment and delivery concerns,
Average Number of Online Purchases Made in the
Past Month by Online Buyers Worldwide, by Region, site translation and localization are obvious barriers when trying to
April-May 2005 sell abroad.
Europe 5.1
Countries Where US Internet Retailers Make Most of
Asia-Pacific 4.9 Their Foreign Online Sales, April 2005 (% of
respondents)
North America 4.3
United Kingdom
South Africa 4.1
46.9%
Latin America* 3.1
Japan
Worldwide** 4.9 8.5%
Note: *Brazil, Chile and Mexico; **includes 38 countries Germany
Source: ACNielsen, October 2005
4.8%
067786 www.eMarketer.com
067786 Australia
3.8%
France
3.8%
Mexico
3.1%
China
1.5%
India
1.5%
Italy
0.8%
Other
25.4%
Note: reflects only those surveyed who process foreign orders
Source: Internet Retailer, WebSurveyor, May 2005
064807 www.eMarketer.com
064807
Latin America Online 12
13. Usage
The October 2005 AC Nielsen study found two payment methods AMIPCI found about a third of online purchases in Mexico were for
used online in Latin America that are almost unheard of in North around $50 (400-1,000 pesos). Another 23% of online purchases
America: bank transfers and COD. Debit card payments for online were between $90-$270. Only 12% of purchases were for more
purchases, on the other hand, stood at only 9%, compared to 22% than that. This is a fair spread of purchase amounts, although the
in North America. reluctance of Latin American buyers across countries to buy
computers or electronics online still indicates a general distrust of
Payment Methods Used by Online Buyers in Select making large purchases remotely.
Countries in the Americas, April-May 2005 (% of
respondents)
Online Purchases in Mexico, by Amount Spent, 2005
Credit Bank Cash on PayPal Debit (% of total)
card transfer delivery cards
(COD)
Canada 79% 3% 4% 33% 2% <150
3,000+
pesos
US 64% 4% 1% 26% 31% pesos
8%
12%
North America 69% 4% 2% 29% 22% 150 pesos-
1,000 pesos- 400 pesos
Brazil 65% 13% 0% 39% 6% 3,000 pesos 21%
Chile 61% 8% 7% 2% 4% 23%
Mexico 61% 16% 17% 5% 17% 400 pesos-
Latin America 63% 13% 7% 18% 9% 1,000 pesos
36%
Source: ACNielsen, October 2005
067807 www.eMarketer.com
Source: AMIPCI, October 2005
067807
072562 www.eMarketer.com
Bank tarjeto de credito (credit cards) are the most popular means 072562
for paying for online purchases in Mexico, according to AMIPCI. In Brazil, the overwhelming majority (84.52%) of respondents to a
September 2005 study by Ipsos (on behalf of CGI) said that they
Online Purchases in Mexico, by Method of Payment,
2005 (% of total) had never made an online purchase.
Bank credit card 45% When Online Buyers in Brazil Made Their Last Online
Purchase, August 2005-September 2005 (% of
Deposit 34%
respondents)
Cash (COD) 10%
Within the last 3 months 6.96%
Commercial credit card 4%
3-6 months ago 2.95%
Check 1%
6-12 months ago 1.81%
Other 6%
12+ months ago 3.76%
Source: AMIPCI, October 2005
Never 84.52%
072561 www.eMarketer.com
072561 Note: n=2,753 who have used the Internet in the past 12 months
Source: Ipsos on behalf of Comité Gestor da Internet no Brasil (CGI),
September 2005
074324 www.eMarketer.com
074324
Latin America Online 13
14. Usage Demographics
D’Alessio and Clarin.com asked Argentinian online shoppers in Who uses the Internet in Latin America? In
July 2005 about a range of purchase types. The survey found that
although many researched purchases online, they were more
Argentina, users are more likely to be younger
likely to make the actual purchase offline. A few exceptions than the rest of the population, according to a July
occurred in the most popular e-commerce categories: computer
2005 study by D’Alessio and Clarin.com.
software, books, online music and auctions were all equally or
more likely to be purchased online after online research. Demographic Profile of Internet Users in Argentina,
2005 (% of respondents)
Online Shopping Habits of Online Shoppers in Age
Argentina, by Category, May 2005 (% of respondents)
<24 46%
Research Buy Buy
online online offline 25-34 20%
35-44 13%
Household appliances 55% 35% 49%
45-54 10%
Education 54% 12% 17%
55+ 11%
Computer hardware 50% 38% 49%
Gender
Subscriptions to courses, events 48% 30% 17%
Sports 47% 8% 42% Male 52%
Books 46% 33% 21% Female 48%
Home decorations 43% 12% 19% Source: D'Alessio and Clarin.com, July 2005
073802 www.eMarketer.com
Travel 42% 18% 34%
073802
Financial services 42% 23% 31%
In Brazil, IBOPE found in a May 2005 study that slightly more males
AFJP (Administradora de Fondos de 39% 1% 19%
Jubilaciones y Pensiones) than females used the Internet. Only 13.1% of Internet users were
Telecommunications 37% 17% 15% 50 or older—and over 27% were minors.
Online music 35% 27% 5%
Items for family members 33% 9% 19% Demographic Profile of Internet Users in Brazil, May
2006 (% of respondents)
Vehicles 32% 3% 11%
Gender
Health, medical systems, pharaceuticals 32% 3% 12%
Male 54.00%
Computer software 30% 20% 12%
Female 46.00%
Event tickets 27% 19% 19%
Age
Food (general) 27% 13% 27%
Clothing 26% 9% 22% 2-11 10.67%
Food (delivery) 26% 17% 25% 12-17 16.64%
Auctions, sales 24% 34% 9% 18-24 17.05%
Newspaper/magazine subscriptions 24% 20% 12% 25-34 18.81%
Insurance 22% 6% 10% 35-49 23.73%
Videos 22% 11% 11% 50-64 11.20%
Other 2% 3% 2% 65+ 1.90%
Source: D'Alessio and Clarin.com, July 2005 Source: IBOPE, May 2005
074058 www.eMarketer.com
074362 www.eMarketer.com
074058
074362
Latin America Online 14
15. Demographics Online Advertising and Marketing
AMIPCI’s 2005 study of Internet users ages 6-64 in Mexico found According to ZenithOptimedia, total advertising
93% were 44 or younger.
spending in Latin America has slowed in recent
Internet Users in Mexico, by Age, 2005 (% of total) years Ad spending is expected to continue slowing
through 2008 when it will achieve 5.5% growth.
45-64 6-12
35-44 7% 8%
12% Advertising Spending Worldwide, by Region,
13-18 2004-2008 (% increase vs. prior year)
23%
2004 2005 2006 2007 2008
25-34 North America 6.1% 3.0% 5.2% 4.2% 3.9%
25%
19-24 US only 6.0% 2.9% 5.2% 4.2% 4.0%
25%
Europe 6.4% 3.7% 4.2% 4.2% 4.2%
Asia-Pacific 6.5% 5.5% 6.8% 7.4% 6.7%
Source: AMIPCI, October 2005 Latin America 13.4% 15.9% 9.6% 6.8% 5.5%
072556 www.eMarketer.com Africa, Middle East, Rest of World 27.7% 16.8% 15.9% 14.1% 14.8%
072556 Worldwide 7.4% 4.9% 6.0% 5.6% 5.3%
The AMIPCI study also found more males than females use Note: includes newspapers, magazines, television, radio, cinema, outdoor
the Internet. and Internet
Source: ZenithOptimedia, April 2006
072007 www.eMarketer.com
Internet Users in Mexico, by Gender, 2005 (% of total)
Online Advertising and Internet Access Spending in
Select Countries and Regions Worldwide, 2004-2010
(millions and % increase vs. prior year)
Female 2004 2005 2006 2007 2008 2009 2010
41%
US $36,343 $40,209 $45,081 $49,950 $53,825 $57,244 $60,168
% change 18.2% 10.6% 12.1% 10.8% 7.8% 6.4% 5.1%
EMEA $42,180 $49,524 $59,942 $64,227 $71,365 $77,838 $83,421
Male
59% % change 27.9% 17.4% 15.0% 12.8% 11.1% 9.1% 7.2%
Asia- $37,656 $48,418 $59,886 $72,905 $85,802 $98,246 $110,282
Pacific
Source: AMIPCI, October 2005 % change 36.2% 28.6% 23.7% 21.7% 17.7% 14.5% 12.3%
072555 www.eMarketer.com Latin $3,469 $4,341 $5,261 $6,156 $6,990 $7,815 $8,581
072555 -America
% change 31.5% 25.1% 21.2% 17.0% 13.5% 11.8% 9.8%
In Venezuela, a February 2006 study by Datanalisis and Tendencias
Canada $1,717 $2,021 $2,274 $2,525 $2,744 $2,922 $3,109
Digitales again found more males than females use the Internet.
% change 16.1% 17.7% 12.5% 11.0% 8.7% 6.5% 6.4%
The study found that 61% of the country’s Internet users were 21
World- $121,365 $144,513 $169,444 $195,763 $220,726 $244,065 $265,561
or younger. wide
% change 27.1% 19.1% 17.3% 15.5% 12.8% 10.6% 8.8%
Demographic Profile of Internet Users in Venezuela,
Source: PricewaterhouseCoopers (PwC), Wilkofsky Gruen Associates, June
December 2005 (% of respondents) 2006
Gender 074053 www.eMarketer.com
Male 55% 072007
074053
Female 45% The story in the online sector is different. According to
Age PricewaterhouseCoopers, online ad spending in Latin America will
12-17 31% increase from $181 million in 2005 to $512 million in 2010.
18-21 30%
25-34 23% Online Advertising Spending in Latin America, 2005 &
2010 (millions)
35-49 16%
50+ 1% 2005 $181
Source: Tendencias Digitales, February 2006
2010 $512
073991 www.eMarketer.com
073991 Note: CAGR=18.7%
Source: PricewaterhouseCoopers (PwC), June 2006
074091 www.eMarketer.com
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Latin America Online 15
