Considering that telecommunications infrastructure expansion, telephone connectivity pricing, and Internet access must continue to improve from its current state, Forrester Research has forecasted that E-Commerce in Latin America will grow to US$82 billion by 2004. According to Forrester Research, the Latin American Internet economy will be principally powered by business-to-business (B2B) trade. Online B2B-related transactions and business activities which surround the growth of the Internet in Latin America could reach up to US$76 billion by 2004. (1)

However, Forrester's predictions, although valid, were derived prior to Argentina's devaluation crises. Certainly researchers must take into account the percentage of this activity, which was to be provided by Argentina, since a slowing economy is at hand.

There are a variety of factors, which will contribute significantly to the continued growth of E-Commerce, both in Argentina and in Latin America as a whole. These factors include public policy initiatives (which must be adopted wholly at the national level but co-steered by the private sector), the continued deployment of phone lines, PC sales increases, greater numbers of Internet hosts, and the further adaptation of cell phone usage. The penetration of phone line access and connectivity pricing are two of the most important elements to this equation. In short, although this region is behind neighbors, such as the United States and Canada, increased partnerships and recently established corporate bases throughout all of Latin America, and especially in Argentina, are signs that the E-Commerce could take greater form soon. In Argentina, these partnerships are even more important to the continued development of ICT, which is why the government has promised to reduce crimes, such as software piracy, in hopes that multinational firms will seed themselves permanently. Microsoft and IBM have already made agreements with the government and local Telcos to build software and services. (2)

As previously mentioned, deregulation has paved the way for e-commerce to begin to take off in the region and Argentina will leverage its newly opened markets, improved infrastructure improvements, and enduring trading partners as well as relationships with multinational firms to capitalize on growing Internet trends - although 2001 demonstrated that not all the answers to business and consumer shopping needs are to be handled by the Internet. Argentine shoppers are still not accustomed to shopping online - mostly due to fears of loosing money or not trusting the vendors. Since this newly opened market is fairly inexperienced as online shoppers, this technological adoption will need a few more years to grow. Nonetheless, other Latin American countries will help lead the way to the continued growth of E-Commerce. In this regard, Brazil is expected to lead the region by trading US$64 billion online by 2004. Argentina is expected to follow with more than $10 billion in online sales." (3)

In 1999 International Data Corp. (IDC) reported that nearly 85 % of companies in Latin America were using or were willing to evaluate e-commerce by 2001. These estimates currently reflect trends in Argentina, exemplified by the growing number of ICT related businesses and the connectivity of firms to the Internet. Moreover, IDC found that Latin American Internet users spent an average of $53 per month on service fees and local phone charges, which amounts to twice the amount spent by US consumers. These expenses reduce the time Latin American users spend online. Therefore, as previously mentioned, it reduces the likelihood that purchases will be made, which is demonstrated by the graphs and tables which will follow shortly. These high connectivity costs are also the main reason that only 20-25% of the region's computers are connected to the Internet. Furthermore, the IDC had estimated that most E-Commerce purchases (74%) were provided to firms working outside the region - many of whom were based in the United States. Although this is not surprising, considering the amount of time which U.S. firms have had to develop businesses online, it stands as a symbol of the "catching up" that E-Commerce firms in Latin America must overcome to keep this money spent local. This is a constant theme in developing countries, reminiscent of the industrialization "catching up" that is still taking place. (4)

A very surprising element of the IDC's report was the weakness of US English-language players throughout the entire region. This market share was expected to drop from 32 % of the market in 1999, to a mere 7 %, or $40 million in sales, by 2000. (5) Therefore, it is a sign of the adoption of other players, most of whom could be manufactured locally. Perhaps, it is a sign of E-Commerce applications business development starting to take form locally.

Local online retailers also seem to be experiencing operational difficulties. The IDC's tests in Argentina, Brazil, and Mexico revealed that many Latin American "e-tailers" needed to improve their product offerings, customer service, and especially on-time delivery performance, which ranked quite low. In this regard, it was revealed that 52 of 118 sites tested did not respond to consumer e-mail inquiries. Furthermore, 42% of the goods ordered arrived after their promised delivery date. (6) These findings were especially true in Argentina, which is why many consumers are adopting slowly to the possibilities of online shopping. Again, a newly deregulated market has not had ample time to develop appropriate strategies for utilizing the potential of E-Commerce, especially when it concerns re-adapting "person-to-person" transactions through computer technology. In Latin America, more so than that of the United States, cultural norms to do business in person are more expected because of the personable, social attributes of the region's populace. However, it is expected that the rated poor performances of many of these E-tailers will improve over the next couple of years as firms gain experience dealing with people through computer screens, which changes how consumer and business expectations take form.

While Internet access costs have fallen considerately over the last couple of years (23+% in Argentina, 20+% in Brazil, and 8+% in Mexico), these lowered rates are still not significant to increase the number of consumers willing to connect to the Internet and shop online. Targeted marketing ploys by WebTV and ISPs offering free service (a tactic which failed in the U.S.) can still not attract an audience - since half of the region's populace is still not able to afford online access. (7) And, with a devaluation crises at hand in Argentina, more consumers will unfortunately reside within this category of the "haves and have nots."

The following graphs and tables will better illustrate unique E-Commerce insights into this portion of Argentina's IT landscape. This information was all derived by the country's Ministry of Communications. (8: For All Tables)

Facts on Argentina's Consumers

Profile of Internet Users, June 2000

	Average Age:29
	Sex: Male (57%)
	Education: University (60%)
	Socio-economic level: ABC1 / C2 (94,5%)
	Residence: AMBA 68% - Interior 32%
	Five years using computers
	Years using Internet: 66% less than 2 years
	Weekly hours using Internet: 12 hrs. (doubled since 1999)
	Typical Internet session: 62 minutes (doubled since 1999)

Purchased Goods

Note: Libros (books); suscripciones (subscriptions)

Length of Time Shopping Online

Note: Menos (less than); entre (between); mas de (more than); compradores (shoppers); antiquedad (length of time)

Percentage of Shoppers Who Purchase

Note: Compro means to purchase