A New Latin Beat

JULY 18, 2006

Arriba!

After years of lagging behind other regions in terms of Internet usage, Latin Americans are now coming online in huge numbers. In particular, the major markets of Brazil and Mexico are re-energizing the sector and giving it a distinctive Latin beat.

"In e-commerce, 30% of Latin American Internet users say that they have bought books online — a bellwether category for other online shopping markets," says James Belcher, eMarketer Senior Analyst and author of the new report, Latin America Online. "Of course, convincing shoppers to go online for bigger ticket items will be tough, since Latin Americans are skeptical about online payment and delivery methods. But that is a barrier e-marketers have overcome before in other parts of the world."

There is a lot to like about Latin America for online marketers.

"For one, demographics," says Mr. Belcher. "Internet users in Latin America tend to be younger than the population as a whole, and they also are more likely to from the middle or upper socioeconomic segments, making them desirable online marketing targets."

To illustrate the point, a study by D‘Alessio and Clarin.com found that online users in Argentina are more likely to be younger and middle or upper class than the rest of the population.

In Brazil, IBOPE found that only 13.1% of Internet users were 50 or older — but over 27% were minors.

An AMIPCI study of Mexican Internet users ages 6 to 64 found that 93% were 44 or younger. Nearly a quarter were 13 to18, another quarter were 19 to 24, and a third quarter were 25 to 34.

"Another plus for e-commerce prospects in Latin America is that broadband adoption is growing," says Mr. Belcher, "and that has been proven to be an e-commerce driver around the world."

eMarketer‘s calculation of broadband subscriber growth in the region, based specifically on Argentina, Brazil, Chile and Mexico, was up 70.7% last year.

"Several countries in Latin America are leapfrogging dial-up altogether," says Ben Macklin, eMarketer‘s Senior Analyst for Access Technologies, "so the region‘s growth curve in broadband adoption may be far steeper than in the US and other regions."